Questions & Answers
Legal restrictions in case of resigning to work with a competitor
Dear Sir,
I worked as a site engineer in a landscaping company for about 3 years.
Now, due to personal reasons, I have to quit the job (notice period given already) and move on to another competitive company.
But in my contract, it has been mentioned that I cannot join in any other competitive companies.
Please suggest to me if I can happily join another company as I have already given the notice period to my existing company or whether I might face any issues in future?
Please reply urgently.
Regards,
If it is clearly mentioned in your contract that you can't join any competitive company, then this is applicable to you.
You might face issues in future because of the clause mention in your contract. Your ex-employer may file a case against you.
Dear S.,
The UAE Labour Law does impose non-compete restrictions on employees but only to the extent necessary to protect the company’s legitimate business interests, and accordingly, the restrictions must be limited with respect to time, place and the nature of work. Please check the clause in your contract.
Injunctive relief is not an available remedy before the UAE labour court and accordingly, companies are unable to obtain a court order preventing their former employees from joining a competitor, unless the employer is located in the DIFC or ADGM both of which are separate legal jurisdictions whereby the respective courts do have the power to grant injunctive relief.
Accordingly, the only recourse an employer has is seeking monetary damages from the former employee or potentially filing a police complaint against them for breach of confidentiality, both of which give rise to their own challenges in practice as they need to be evidenced to be proven against the employee.
The Labour law also provides that the MOHRE may refrain from issuing a work permit (or withdraw a work permit that has already been issued) where a final court judgment finds that the individual is (or would be, if a new work permit is issued) in violation of the non-compete obligations owed by the individual to their former employer.
This action can be taken by the Ministry in respect of the validity period of the non-compete restriction.
For example, if the individual has a six-month non-compete restriction, the Ministry may refrain from issuing them a new work permit (or withdraw a work permit that has already been issued) for a period of six months following termination.
This will not be a threat if you are joining a free zone company.
