Non-competition clauses remain widespread among IDA members

Many engineers, IT specialists and science graduates remain bound by non-solicitation and non-competition clauses. The proportion is the same today as it was 10 years ago. These are the findings of new figures from IDA.

In 2015, 13 per cent of IDA’s members employed in the private sector had a non-competition clause. In 2025, this applied to 14 per cent. The same trend is evident with customer clauses. Here, the proportion of members who have a customer clause as part of their employment contract is virtually the same today as it was in 2015.

Back in 2016, legislation in this area was tightened with the aim of limiting the prevalence of such clauses. However, the legislative change has had no effect on IDA’s members.

'We can conclude that the 2016 Act has not had the desired effect. We are left with the status quo. Non-compete clauses are shackles on knowledge and are counterproductive in terms of job mobility and thus competitiveness. The time is ripe to ban them once and for all,' says Malene Matthison-Hansen, chair of the IDA Council of Employees.

This was also the conclusion of the Productivity Commission’s recommendations back in 2014. The Commission recommended banning non-compete clauses because they hinder labour market mobility and restrict innovation. The Commission pointed out that the ban on such clauses, which was already in place in California in the US at the time, means that employees there can more easily change jobs or start their own businesses. And that boosts productivity.

In April last year, a ban on non-compete clauses was introduced, applying across the whole of the US. This creates an uneven playing field between companies in the US and countries such as Denmark, which still have such clauses.

Malene Matthison-Hansen believes that, in the wake of Mario Draghi’s 2024 report on the EU’s faltering competitiveness, this should give us pause for thought.

'Clauses are a barrier to people changing jobs. Either a potential new employer will decline to hire you, or you risk being placed on a waiting list – in simple terms, being sidelined for months – before you can start a new job. One can also imagine situations where you cannot perform certain tasks in your new job for fear of breaching the clause,' she says.

'Companies are already protected by the Marketing Practices Act and the Trade Secrets Act. These clauses make it more expensive and difficult to attract and retain the best employees. If you want to retain staff, you need to win them over with attractive terms and career development rather than tying them down with non-compete clauses,' says Malene Matthison-Hansen.

IDA’s survey shows that non-compete clauses are particularly widespread in sectors such as the engineering, iron and metal industries, the pharmaceutical industry, and within IT and telecommunications.