Hristo was bound by a clause: “It creates a lot of anxiety”

Hristo Shkalov did not give much thought to the fact that his employment contract contained a non‑compete clause when he started his first full‑time job.

“I was just happy to get a job as a newly qualified graduate and to get started,” says Hristo Shkalov, who is originally from Bulgaria but trained as a mechanical engineer in Denmark and has lived and worked here ever since.

But when he wanted to try something new after several years in the same company, he realised that it would be both costly and complicated.

His non‑compete clause meant that he could not apply for a job involving his area of specialisation — wind turbine blades — for six months after resigning. During that period, he would receive only 60 per cent of his normal salary.

“I have two children and a mortgage, so of course I was worried about how things would work out. I also had to speak to the bank to find out whether it was even possible,” he says.

For Hristo Shkalov, it was difficult to assess which jobs he was allowed to apply for while the clause was in force. And because he is highly specialised in a narrow field, his opportunities were already limited.

“I have specialised in wind turbine blades and how to optimise them so that they capture wind in the most efficient way.”

“And although, in principle, I could use some of the same processes when working with turbines or other wind turbine components, each individual part requires so much specialisation that I would be overlooked if I were competing with another candidate who had experience in exactly that area,” Hristo Shkalov explains.

Clauses hinder professional development

What concerned Hristo Shkalov most when he handed in his notice was not the financial consequences of the non‑compete clause, but the fact that he would be away from his professional field for an extended period.

“The wind energy sector is a small field, and it really matters who you know and what your reputation is like. A six‑month break is a long time, and it weakens your relationships.”

“On top of that, developments move so fast that it takes a great deal of effort to catch up again and to update yourself on everything that has happened while you’ve been away,” he says.

In 2014, the Danish Productivity Commission recommended limiting the use of restrictive clauses because they hamper productivity, job mobility and competition. The same conclusion appears in the much‑discussed Draghi report on the EU’s competitiveness from 2024.

Legislation on clauses was tightened in 2016 by increasing compensation requirements and limiting the duration of clauses. However, after ten years the changes have had no effect. While 13 per cent of IDA’s privately employed members had a non‑compete clause in 2016, the figure was 14 per cent in 2026.

According to Malene Matthison‑Hansen, Chair of IDA’s Council of Employees, the time has therefore come to abolish clauses altogether.

“We can conclude that the 2016 legislation has not worked as intended. We are left with the status quo. Clauses are handcuffs on knowledge and are counterproductive to job mobility and thus to competitiveness. The time is ripe to ban them once and for all,” she says.

IT company has abolished clauses

The IT company Systematic supplies software for critical infrastructure, the police and the military in several countries, and therefore has a strong need to protect its business secrets. Nevertheless, the company chose to abolish non‑compete clauses entirely when the law was changed in 2016.

“We feel that we already have a strong toolkit without clauses, because we have the duty of loyalty, the Trade Secrets Act and the Marketing Practices Act. Our employees understand perfectly well that you don’t go around sharing work‑related information — regardless of whether you are formally security‑cleared or not,” says Rikke Feldtmann Fenger, Head of People and Culture at Systematic.

She also points out that clauses are a hindrance when Systematic competes with other IT companies to attract talent.

“We need the very best IT specialists, and they have plenty of options when they are looking for a job. If they are choosing between two equally attractive job offers, it is obvious that they will choose the one without a clause, because clauses have such major consequences for their career.”

“More generally, our aim is to be a pleasant place to work, and we want employees to be here because they want to be, not because they are bound by a clause. I can say that our annual staff turnover is 7 per cent, which is very low for our industry,” says Rikke Feldtmann Fenger, emphasising that Systematic does not take a position on whether clauses should be banned or not.

“It creates a lot of anxiety”

Although Hristo Shkalov describes himself as someone who is not easily shaken, being bound by a clause was a stressful experience for him.

“It creates a lot of anxiety, because you are constantly unsure about what you are and are not allowed to do. I have many good friends in the industry and at my former company, but I wasn’t even sure whether I was allowed to speak to them.”

“At the same time, the longer I was away from my field, the more the stress increased, so I was really relieved when I was finally allowed to start applying for jobs again.”

Fortunately for Hristo Shkalov, it did not take long for him to find a new job once his clause expired. Today, he is a partner in a consultancy specialising in wind energy. As a partner involved in hiring new staff, there is one principle he is firm about: new employees must not be subject to a non‑compete clause.

Legal advisor: Try to limit your clause if you cannot avoid it

Malthe Neumann Poulsen is a legal advisor at IDA and frequently speaks to members before they sign their employment contracts.

He finds that many people are unaware of the impact clauses may have if they want to change jobs later on.

“We always try to stress that clauses can become a barrier to changing jobs and that it can be very costly if you breach a clause. But naturally that isn’t what weighs most heavily on people’s minds when they’ve just landed a new job they’re excited about,” says Malthe Neumann Poulsen.

According to him, it is particularly important to be alert to clauses if you are highly specialised and only intend to apply for roles within a limited field.

“Then it suddenly becomes very difficult to move on. By contrast, if you have a broader profile and know that you can apply for several types of roles across different industries, a non‑compete clause is not the same kind of obstacle.”

It is often difficult to persuade an employer to drop a clause altogether, but Malthe Neumann Poulsen advises making it as specific and limited as possible.

“If you are going to have a non‑compete clause, you should try to get a list of the companies you are not allowed to move directly to. If it simply says that you may not move to a competing company, it quickly becomes a grey area — and then it is your employer who decides whether you are allowed to apply for a job or not. And you don’t exactly walk into your manager’s office to ask whether it’s acceptable for you to apply elsewhere,” he explains.

He also points out that you can try to negotiate a shorter duration for the clause or a higher level of financial compensation.