How can auction houses, galleries and art dealers protect their network and expertise?

Publication date: 4 September 2019
Auction houses, galleries and art dealers must protect their network and expertise. This can be achieved by including non-compete, non-solicitation and confidentiality clauses in employment contracts with key employees or in contracts for services with freelancers. The drafting of these clauses requires the specialist knowledge of an art lawyer.

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The art world does not only have to deal with the law in disputes over authenticity and provenance of works of art. The protection of the network and expertise of auction houses, galleries and art dealers is also an issue. Sound agreements with key employees and with freelancers about confidentiality, non-competition and contacts with business relations are of vital importance to your art business.

Non-compete clauses, non-solicitation clauses and confidentiality clauses with a penalty clause are the most common ways to prevent key personnel from making use of the knowledge and contacts they have acquired. However, such clauses must be worded carefully or they will either be invalid or not applicable.

Non-compete clause

A non-compete clause must be laid down in writing and limited in duration, location and sector. A non-compete clause in a fixed-term contract will only be valid if the clause states which substantial business interest is the reason for the inclusion of the clause. This is not required in permanent employment contracts. However, it is wise to think carefully about which competitors you wish to exclude. Also take into account the possibility that the employee starts his own business.

Non-solicitation clause

The same requirements apply to a non-solicitation clause as to a non-competition clause in respect of written form and temporary contracts. Particular attention should be paid to prohibiting contacts with relations through social media.

Confidentiality clause

A confidentiality clause in the art trade will mainly concern the knowledge of business processes and relationships. The employee must not, by definition, disclose any business secrets or harm the competitive position of the employer. However, it is wise to make explicit agreements and to lay these down in writing for the time the employment contract has ended .

International employment contracts

The rules set out above only apply to employment contracts that fall under Dutch law. If your employee starts working abroad, the provisions will continue to apply under Dutch law. If you hire someone from abroad, other rules might apply. In the US, these rules may even vary from state to state. Therefore, always have checked-out whether your new employee is allowed to work for you.

Freelancers and self-employed workers without employees

You can include agreements about non-competition, non-solicitation and confidentiality in the contracts for services with freelancers and other self-employed workers without employees. The first two, however, will not be as strictly enforced as in the case of employees. Nevertheless, it is wise to make such agreements. Keep in mind, however, that such agreements may also be an indication that there is an employment contract instead of a contract for services. Particularly in view of the obligation for a self-employed worker without employees to have more than one client, caution is called for. Therefore, seek the advice of an employment lawyer on this.

More information

Are you looking for an employment lawyer in the art sector? Would you like to have a non-competition clause, a non-solicitation clause or a confidentiality clause drawn up? Or do have any other questions concerning art and law? Please contact us:

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