The Non-Compete Clause in Employment Contracts

There is a great debate going on regarding the non-compete clause since according to a vast majority of individuals, this clause is restrictive in nature and violates the right to work as embodied in many constitutions all around the globe. In my opinion, too, this clause somehow restricts the right of an individual to seek alternate employment, just because he has signed an agreement which contains a non-compete clause. In harsh economic conditions and in case you have a boss who is greedy and doesn’t give you hike, any person who has signed a contract with such a clause will find himself or herself in a great deal of difficulty.

Employer Perspective

From an employer point of view, this clause is important because:

• It protects his legitimate business interests; and
• It prevents the employee from competing with the employer by joining a competitor or himself starting the same business to compete with the employer.

Employee Perspective

From an employee perspective, this clause should not be included because:

• It is restrictive in nature and violates fundamental human rights;
• It can result in joblessness;
• It restricts the job options available;
• It stifles competition.

Conclusion

It’s always better to end every relationship on a good note. An employer cannot adopt a uniform contract with restrictive covenants for all the employees in the company. Generally, the senior position holders in the company are those who possess and get access to confidential information. But still, I am not too supportive of this clause and at the same time, from an employer's perspective, it’s very necessary too.

Recently, the UAE has adopted a uniform labor contract to stop the abuse and harassment of employees by employers and to promote accountability.

Written by:

Hamad Bushlaibi | Hamad Bushlaibi Advocates & Legal Consultants