Questions & Answers
Non-competition clause as a restrictive covenant in the employee's contract
Good morning.
An American company is working as an advisor for the Dubai government. The company has got employees to sign a non-competition clause document, prohibiting them from working for the same clients for a period of 1 year.
Now, employees resigned and might work directly or indirectly with the same clients. The company is threatening to sue the former employees for non-compliance with that clause and make them obtain the company's legal authorization to do such work.
Can you please advise the level of legality and also what is the appropriate next step?
Dear Sir.
Many thanks for your enquiry.
If any of the employees signed up to the restrictive clause above, their employers will be able to enforce it in a court of law if they can prove the restriction is:
1. Reasonable in time and geographic location;
2. Designed to protect legitimate interests of the employer e.g. employer's trade secrets, know-how, business processes etc while existing contracts are in place with the government;
3. Prevent employees touting the company's clients to new employers.
