On 12 October 2012, the Maritime and Commercial Court ruled that a former employee had lost his right to claim compensation for having undertaken a non-solicitation clause during his employment, because he had started an independent business thereby disregarding the duty of mitigation.

According to the contract of employment, the employee was covered by a non-solicitation clause for a period of six months after the effective date of termination and he would receive compensation for the clause.

In August 2009, the employee terminated his employment, and in September 2009 he established his own business. In October 2009, he claimed compensation in accordance with the clause, which was rejected by the former employer, who at the same time terminated the clause for expiry by the end of November 2009.

The Maritime and Commercial Court found that it had been proved that the former employee had used a significant number of working hours to establish his own business, and he had therefore not been available for the labour market, and he was therefore prevented from claiming compensation for the clause.

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The ruling is not in itself surprising, as previous case law has also established that a former employee does not observe the duty of mitigation when starting an independent business. It has, however, often turned out to be difficult for the employer to prove that the former employee has not observed the duty of mitigation. In this case, the employer succeeded. The ruling serves as a reminder for the employer that the employee may be subject to a duty of mitigation vis-á-vis the employer in connection with termination, including when the employee is released from the duty to work and when compensation is paid for non-competition and non-solicitation clauses.

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Kristine Friis Nolsø

Senior Attorney