Non-compete in Denmark: clause rules, pay and employee IP

Yes, but only a narrow group of them, and only if you pay for it. Since 1 January 2016 the Employment Clauses Act (Ansættelsesklausulloven, Lov nr 1565 of 15 December 2015) has decided when a restraint after employment holds. A clause that misses one of its conditions does not bind the employee at all, so drafting it loosely costs you the protection you thought you had.

Timing matters as much as wording. A clause can go into the first contract or be added later, but a later addition is a change to the terms of employment, and under Ansættelsesbevisloven § 5 it must be handed to the employee in writing by the date the change starts to apply. Adding a non-compete to an existing contract also tends to be negotiated rather than imposed, so plan it alongside a promotion or a pay review, when there is something to offer in return.

The Act separates three things that foreign employers tend to lump together. A non-compete (konkurrenceklausul) stops the person working for a competitor or setting up in competition. A customer clause (kundeklausul) only stops them dealing with named customers. A no-hire clause (jobklausul) is an agreement between two companies not to employ each other’s staff. The first two are allowed under strict terms; the third is void in nearly every case.

Two features surprise managers used to other systems. The employer must pay monthly compensation for every month the clause runs, and the employer can usually walk away from the clause later. That makes a Danish non-compete something you budget for and review, rather than boilerplate you add to every contract.

Section 5 of the Act sets the test, and all parts of it must be met at once. Read it as a checklist for each role, not as a standard paragraph for the whole team.

• The employee holds a particularly trusted position (særlig betroet stilling), or has agreed with you on how an invention will be exploited.
• You have explained in writing why the clause is needed for that person.
• The employment has lasted at least 6 months when it ends.
• You pay compensation for the restricted period, at the rates set in §§ 8 and 9.
• The restriction runs for no more than 12 months after the employment ends, and every element is in writing.

The trusted-position test does most of the filtering. A head of product with access to the pricing model and the roadmap may well qualify; a support engineer handling tickets is unlikely to. If you cannot write a credible sentence about why this particular person could damage the business by joining a rival, the clause will struggle in court.

The 6-month service condition matters for new teams. If you dismiss someone after four months, any non-compete in their contract has no effect, whatever it says. Write the written explanation at the time the clause is agreed, and keep it with the contract file; producing it after a resignation looks like what it is.

Compensation is a percentage of the employee’s monthly pay at the time of leaving, and the rate depends on the length of the restriction. Sections 8 and 9 set the floors:

• Clause of up to 6 months: at least 40% of monthly pay, falling to 16% from the third month if the person has found other suitable work.
• Clause of up to 12 months: at least 60% of monthly pay, falling to 24% from the third month on the same condition.
• Combined non-compete and customer clause: at least 60%, again dropping to 24% from month three if the person is working elsewhere.
• The first two months are paid as a lump sum when the employment ends, not month by month.

Take a salaried engineer on DKK 55,000 a month, the base salary used throughout this site’s 2026 cost examples. A 6-month non-compete costs at least DKK 22,000 a month, and DKK 44,000 is due in one payment on the last day. A 12-month version costs at least DKK 33,000 a month, with DKK 66,000 up front. If the engineer starts a new, non-competing job straight away, the rate from month three drops to DKK 8,800 or DKK 13,200 a month respectively.

Add those sums to your exit budget before you agree the clause, because they are payable whether or not the person would ever have joined a competitor. Our breakdown of the notice and severance rules covers the other amounts that can fall due on the same day.

A customer clause is the lighter tool, and for many sales and account roles it protects what you actually care about. Under § 6 it may cover only customers the employee has dealt with in the 12 months before leaving. The other conditions mirror the non-compete: 6 months’ service, written terms, compensation, and a maximum of 12 months. On leaving, the employee is entitled to a list of the customers the clause covers, so keep CRM ownership records tidy enough to produce one.

Picture an account manager who has handled 40 accounts over the last year. A customer clause can stop them serving those 40 for a period after they go, but not the hundreds of other companies in the same market, and not accounts they only heard about in meetings. That precision is the point: the clause protects relationships the employee built on your time and leaves the rest of the labour market open.

If you combine a non-compete and a customer clause for the same person, § 7 caps the combined restriction at 6 months. Many employers find that a 6-month combined clause at 60% gives a cleaner result than a 12-month non-compete that a court may trim.

No-hire clauses between companies are a different matter. Sections 3 and 4 make them void, with one exception: during negotiations for a business transfer, the parties may agree not to hire each other’s staff for at most 6 months. Do not rely on a clause in a supplier or services contract that forbids a Danish employee from being hired by your customer or your contractor; it has no effect against the employee.

You can end a clause you no longer need. Section 10 lets the employer cancel it on one month’s notice, expiring at the close of a calendar month, and the compensation stops from then. This is useful when a role changes, or when it becomes clear that the person leaving poses no competitive risk; the decision is worth taking before the resignation rather than after.

The clause also falls away on its own in one common situation. Under § 11(1), if you dismiss the employee and they have not given you reasonable cause, the non-compete lapses. The lump sum still has to be paid. In practice, then, a non-compete mostly protects you when the employee resigns or is dismissed for their own conduct.

Courts can also cut a clause back. Section 11(2) allows a clause that goes further than the employer reasonably needs to be set aside or narrowed, so a 12-month worldwide ban for a mid-level role invites challenge. Collective agreements may vary the compensation chapter (§ 2), which is one more reason to check whether an overenskomst applies before drafting. Read the Act itself on Retsinformation.

The employer owns the code. Any program a staff member writes while doing their work, or on instructions from management, is caught. Section 59 of the Copyright Act (Ophavsretsloven) transfers the copyright in a computer program to the employer by law, so a developer’s day-to-day output does not need a separate assignment to change hands.

Outside software, do not assume the same result. For documentation, designs, marketing copy and similar works, write the transfer of rights into the employment contract rather than relying on the purpose of the job. A clear clause listing the kinds of material the person will create, and stating that rights pass to the employer, avoids arguments later.

While the employment lasts, a different rule limits what you can stop. Section 7 of Ansættelsesbevisloven, the statute on written terms, limits how far an employer can block other paid work on the side: a ban is possible only where the two jobs clash, on grounds such as trade secrets, health and safety or a conflict of interest. For salaried staff, Funktionærloven § 15 points the same way. Draft an outside-work clause around those grounds; our article on Danish written terms and probation explains what else the contract must contain.

Remote staff raise separate questions about equipment and working time, set out in our guide to home working in Denmark.

Patentable inventions follow their own Act, the Employee Inventions Act (Opfinderloven), and the starting point is that the employee owns them. The employer can, however, require the rights to be transferred if the invention came out of the job and falls within the business, or relates to a task the person was given (§§ 3 and 5).

The process has deadlines. The employee must tell you about an invention without undue delay. You then have 4 months to claim it. If you take it, the employee is entitled to reasonable compensation, unless the invention is worth no more than what the job itself could be expected to produce. Patent applications filed within 6 months after the person leaves are presumed to come from the employment (§ 9), and agreements that try to capture inventions made more than a year after leaving are void (§ 10). The Act is published on Retsinformation; patents themselves are handled by the Danish Patent and Trademark Office.

If you hire through an employer of record, these clauses and the IP terms sit in the Danish contract the EOR issues, and your agreement with the EOR should say how rights in the work reach your company. Check that point when you compare providers; it features among the points in how to judge an EOR before hiring in Denmark. For how the arrangement divides tasks between you and us, see the employer of record role explained, or start at Employer of Record Denmark.