Questions & Answers
Legal implication of a non-compete agreement
I have signed an internal employment agreement, which states that I cannot work with the competitor if I resigned.
"The employee covenant with the company that he will not for a period of twelve months after the date of termination of his employment for whatever reason, be concerned in any the business which is carried on in the UAE and which is competitive with any business which is carried on by the company at the time of termination. The employee shall not after the termination of this agreement directly or indirectly on his own account or on behalf of or in conjunction with any person for a period of 12 months thereafter induce or attempt to induce any employee to whom this subclause applies to leave the employment of the company."
What is the legal status of this agreement?
This is an internal agreement in English only and has not been attached to the labour contract.
Dear Sir/ Madam,
Thank you for reaching out to me on this.
Please note that even though this agreement does not find a place in your labour contract, it is still binding between the parties and you are bound by it.
However, the enforceability of such agreements is a question for the court to decide.
Looking into the past judgements, it appears that this Agreement will not be enforced since the non compete clause is very widely drafted i.e. your employment is not restricted to your designation, industry and geography.
The term of 12 months and the whole of the UAE is construed as being wide and will not be upheld by the court.
Further, the company needs to file a civil case against you enforcing this agreement and will have to prove that by joining the competitor, you have caused loss to them and shared certain crucial information with the competitor.
Such evidence is unlikely to be proved in the court of law.
I trust this will resolve your query.
Regards,
Hari Wadhwana
052-9495731
