Restrictions on knowledge are holding back Danish growth

Published in Børsen on 21 March 2026

By Anne Waagstein, Chair, Djøf Privat, and Malene Matthison-Hansen, Chair, the Council of Employees at IDA

In just a few days, Danes will go to the polls. During the election campaign, the political parties are talking about growth and Denmark’s ability to compete internationally. They should therefore also explain why we continue to accept non-compete clauses that make it harder for some of the most sought-after employees to change jobs, create new value and start businesses.

At Djøf and IDA, we want to put an end to these clauses because they act as handcuffs on knowledge and weaken both individual job mobility and the competitiveness of Danish businesses.

For example, non-compete clauses can prevent an employee from taking up a job with a competitor for up to 12 months after changing employment. This restricts mobility in a labour market where companies are calling for access to the right skills.

This hits precisely the profiles needed to drive innovation, productivity and the implementation of new technology.

Careers on hold

When an experienced engineer, lawyer, economist or specialist cannot change jobs without the risk of a quarantine period or conflict, recruitment becomes more difficult and more expensive for employers. For a small growth company, waiting several months for the right profile can be costly.

For the individual employee, a clause may mean that an obvious career move or a start-up idea has to be put on hold.

Things should have improved by now. In 2016, the Danish Parliament tightened the rules on non-compete clauses in an effort to limit their use. However, the effect of the legislative amendment has been limited.

Current legislation is not working

Among IDA’s privately employed members, 14 per cent were covered by a non-compete clause in 2025. Among Djøf’s privately employed members, the figure was 9 per cent. In both organisations, the level has remained strikingly stable in recent years. Unfortunately, the 2016 Act has not worked as intended.

In the run-up to the legislative change, the Productivity Commission recommended abolishing non-compete clauses altogether in 2014. The Commission highlighted the ban on such clauses that was already in place in California at the time, making it easier for Californian employees to change jobs or start their own businesses.

Ahead of the election, the Minister for Employment launched an evaluation of the legislation on non-compete clauses and commissioned VIVE to carry out a study of their use in the business sector.

The study shows that fewer companies use clauses today compared with 2015. However, the picture is mixed: the decline has primarily occurred among small businesses, while use has increased in companies with more than 250 employees. Around one in three of these companies use non-compete clauses and customer non-solicitation clauses, respectively. As these companies account for around half of private-sector employment, the overall number of clauses remains far too high.

VIVE concludes that only a small proportion of companies experience other firms’ clauses as a barrier to recruitment.

But lost candidates rarely leave a paper trail. Many do not apply at all if they know a clause will close the door. There are therefore likely to be hidden figures, and we risk underestimating the extent to which clauses actually restrict companies’ access to skills.

VIVE’s figures also say something important about who is affected. In companies that use non-compete clauses, around seven out of ten managers and just under half of specialists and highly educated employees are covered by such clauses.

These are exactly the profiles needed to boost productivity, implement new technology and translate strategy into growth. At IDA, the share of members covered by a non-compete clause has increased since the legislation came into force in 2016 – from 11 per cent in 2016 to 14 per cent in 2025. At Djøf, the figure has stagnated at 9 per cent – a reduction of just two percentage points since 2016.

Already protected

Companies must, of course, be able to protect customer relationships and trade secrets. But this does not require clauses that lock employees in. Companies are already protected by the Marketing Practices Act and the Trade Secrets Act.

Our call to action is therefore simple: the next Minister for Employment should take the evaluation of the legislation seriously and ban non-compete clauses. There should also be meaningful sanctions for breaches and a sunset clause for existing agreements, ensuring a clear and smooth transition.

When political parties ask voters for a mandate to strengthen Denmark’s competitiveness, they should answer clearly: do they want to uphold a rule set that ties up knowledge and restricts mobility – or will they remove a barrier to growth?

Skilled employees should be attracted and retained through attractive terms, professional development and good leadership – not through restrictive clauses.