Questions & Answers
My company asked me to sign a non-compete agreement. Can I leave the company and start the same business?
Hello.
My company asked me to sign a non-compete agreement written on their company letterhead, but now I want to leave the company and start my own company in the same business.
Can I do that?
Please note that the non-compete clause is not in my MOHRE contract.
Dear Client,
Thank you for your message.
Regarding the non-compete agreement your company asked you to sign, please note the following based on UAE law:
1. A non-compete clause is valid only if it is limited in time, place, and type of work to protect the legitimate business interests of the employer. The maximum enforceable period is two years from the end of the employment contract.
2. Since the non-compete clause is not part of your official MOHRE employment contract but only on the company letterhead, its enforceability may be limited unless you explicitly agreed to it as part of your employment terms.
3. Under UAE Federal Decree-Law No. 33 of 2021, non-compete clauses apply only if the employee has access to confidential information or client relationships that could harm the employer's business if used competitively.
4. If you decide to leave and start your own company in the same business, you should carefully review the scope of the non-compete clause and ensure it does not unfairly restrict your ability to work.
Courts typically assess whether the clause is reasonable and necessary.
I recommend reviewing the specific non-compete document you signed. I offer legal advice and representation to assess such agreements and guide you on your rights and options to start your own business without legal risk.
Please feel free to contact me for a consultation.
Best regards,
Abdul Wahied
Hello,
Under UAE law, the enforceability of a non-compete clause depends on Federal Decree-Law No. (33) of 2021 on the Regulation of Labour Relations. Article (10) of this law governs non-competition agreements and states:
"Article (10) Non-Competition Clause
Where the employee performs a job which allows him to gain knowledge of the employer’s clients or access to the employer’s business secrets, the employer may make a provision in the employment contract that the worker shall not compete with or be engaged in any business which competes with him in the same sector after the expiry of the contract. Such clause shall specify the place, time and type of work to the extent necessary to protect the legitimate interests of the employer.
The non-competition clause shall be valid for a maximum period of two years after the expiration of the contract.
The clause shall become void if the employer terminates the employment contract in violation of the provisions hereof.
A lawsuit shall not be heard regarding the non-competition clause if one year has passed from the date of the violation."
Because your MOHRE labour contract does not include a non-compete clause, the agreement signed only on the company’s letterhead is generally not enforceable as part of your official employment relationship.
Courts in the UAE usually rely on the registered labour contract as the binding agreement. However, if the company seeks to enforce the letterhead non-compete through civil litigation, they would still need to prove it meets the requirements of Article (10), particularly in scope of time, geography, and type of work, and that it was properly consented to.
If you have not yet signed this paper, then do not sign it. Since the non-compete clause is not included in your MOHRE contract, it is difficult for the company to prove it merely through an internal agreement, although it is not impossible.
If you wish, I can assess the exact wording of the non-compete you signed to confirm whether there is any legal risk. You may contact me by phone or email so I can give you a precise view tailored to your case.
If you prefer to have a direct discussion, please let me know, and I will guide you on how we may proceed. Alternatively, if you require further clarification, you may kindly share your WhatsApp number here so that I can provide more detailed assistance.
Yes, you can establish your own company in the same field, because the non-competition agreement you signed with your company on its official letterhead is not legally binding unless it is included in the employment contract and approved by the Ministry of Human Resources and Emiratisation.
Since the non-compete clause is not part of your official MOHRE labor contract, and assuming you did not sign the company’s letterhead agreement, you are generally free to start your own business in the same industry.
If you did sign the non-compete, its enforceability in the UAE depends on whether it is reasonable in scope, duration, and geographic area, and protects a legitimate business interest.
