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Non-competition clause as a restrictive covenant in the employee's contract
Q: 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?
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Dec 17, 2017
Non-competition agreement and its enforcement in the UAE
Q: Hi, I'm Sanu from Abu Dhabi, my job is medical coding. I need a clarification regarding joining the client of my employer. I have completed 3 years with my current employer (Billing Services DMCC, Dubai). My 3-year contract was expired and cancelled. Now one of my previous employer clients (a government hospital) is approaching me to join with them. I have already signed a non-competition agreement which has a clause - I cannot join my employer own client for 2 years. Please note, currently, the contract between my previous employer and this government hospital has been cancelled. Please advise is there any exception that I can join with own client as it is government sector? Is there a chance my previous employer can make a case against me? If they raise a case then how to survive?
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Oct 24, 2017
Enforcement of non-competition clause in labour contract
Q: I have signed a labour contract with the non-competing clause for 12 months. I would like to know, how this can be enforced if I join another company whose activities are not exactly the same but are similar. I'm working for a manufacturing company and would like to join the trading company, which is my former employer. My current employer is not comfortable with me going back to my former employer and is asking me to refrain from this based on the clause in my contract. Kumar
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Apr 9, 2017
The effect of non-competition agreements and clauses on the employee
Q: Recently, our management (Free zone company) asked us to sign a document. It mentions 3-month notice period as one clause. The other being if the resigned employee approaches or starts a business connection (as supplier and buyer) with one of the existing clients of the ex-employer, the ex-employer can file a case against the ex-employee for USD 100 K. What's the legal validity of this? I heard any document, or contract will not be valid once the employee visa is cancelled.
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Feb 3, 2019
Applicability of the non-competition clause after leaving job
Q: Dear Madam, I was previously working as a manager in a company providing auditing & accounting services. I had a non-compete clause inserted into my labour contract. Currently, I have joined a company with a similar practice at a lower salary and designation as I was not able to get a better opportunity. I have informed my previous company regarding the same and they want an email from me stating that I won't indulge in direct competition. Will sending out such a letter have any implication in future?
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Apr 1, 2019
The validity of restrictive covenants in employment contracts
Q: I need advice on restrictive covenants of an employment contract.
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Mar 25, 2021
Validity of the non-competition clause in employment contracts
Q: Dear Madam I am under a limited employment visa. In my appointment letter, my employer mentioned: "Special term - that you agree not to take any employment with any other company based in the UAE during the contract period and that you will understand not to seek any employment in the UAE for a period of 2 years from the date of termination, resignation or completion of your service without the prior approval of the company." The situation at that time is I signed this letter and when I asked for a copy he said copies are not given to employees. Now please tell me that if I resigned, am I really not allowed to work with other companies for two years in the UAE? And what if I don't want to serve 3 months notice period. He also took my original educational certificates and my passport. How can I get them?
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May 30, 2021
Ensuring that the employee will not approach the clients after leaving
Q: I have a small company of 4 people. One of my oldest staff who has worked for 11 years is leaving. He handles 80% of my clients and work. Without proof, I know he is going to open his firm. I don't want to harm him but I want to secure my clients. Is it legally okay for me to make him sign a contract that he cannot approach my clients in the near future? If yes, then what will be the procedure? Do I have to go to the notary to make this contract valid?
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Oct 8, 2019
I resigned to join another company. Can the employer deduct 12 months from my EOSB?
Q: My previous employer sent me a legal notice asking me to lay 12 months' salary = AED 120,000 after resigning to join another company. They threatened me with a non-competition clause that I signed for them before I joined. You can find a copy in the below link: [----] Kindly help, I need advice on what I can do.
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Jul 5, 2022
Warning to stop convincing colleagues from previous company to leave their job
Q: Warning to stop attempts to incite employees of the foreboding company to leave their work. I received the above legal notice from my ex-employer.
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Nov 14, 2022
Legal blog
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How to File an Employment Court Case in the UAE
An interview-format article covering the topic of filing an employment court case in the UAE. This is from the legal podcast of lawyer Ludmila Yamalova, the founder of Lawgical with LYLAW.
May 10, 2021
An Overview of the New UAE Labor Law and Recent Amendments of 2024
The UAE has adopted a major reform in its legislative system that brought about 40 new laws and amendments to the company law, criminal law, personal status, among others. The amendments aim to develop the legislative structure in various sectors, the labor law being one of these, was the most recent. We try in this article to shed light on the changes introduced with the new labor law and their significance on both, the employer and employee.
Sep 10, 2024
Laws & Regulations
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Federal Law No. (8) of 1980 Concerning the Regulation of Labor Relations
The provisions of this Law, known as "UAE Labour Law", govern the relationship between employers and employees and other labour matters in the United Arab Emirates. There are special labour related regulations applicable in some of the free zones in the UAE.
Apr 20, 1980
Federal Decree-Law No. (33) of 2021 On the Regulation of Labor Relations
The provisions of this Decree-Law, known as "New UAE Labor Law", govern labour relations in the private sector of the United Arab Emirates. The New Labor Law repeals the previous UAE Labor Law (Federal Law No. (8) of 1980).
Sep 20, 2021
Yousef Hamza
Other answers by
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Legal requirements for starting business by a minor in the UAE
I am planning to start my business in retail. I am a 16-year-old Emirati national and I have full approval from my parents. What legal requirements must I obtain and what laws should I follow?
May 3, 2020
Using the trade license of an existing company to start business
If I am looking to use the general trading license of an existing individual to start my business and creating my company under his license, then what are the things I should watch out for to protect myself?
Oct 3, 2018
Seeking legal assistance for drafting a Merchant Agreement
I am seeking a law firm/agency in Dubai that can provide the services to draft a Merchant Agreement template contractually, according to our company business model.
Oct 3, 2018
Documents required for the registration of a sole trader
How to register a sole trader? What documents are needed?
Oct 3, 2018
Non-payment of share value and claiming the shares back
My company is located in Dubai as an LLC. We have two shareholders, 1. UAE national shareholder with 95% 2. A foreign shareholder with 5% The UAE national shareholder transferred this 5% shares to the foreign shareholder through a share sales agreement, which was notarized at the notary public in Dubai and submitted it to the DED to amend the trade license etc. This happened in 2014. But till this date, the foreign shareholder did not pay the value of 5% shares to the UAE national shareholder or to the company. Also, the foreign shareholder was not actively involved with the company's operation and as per Article 17 of the Commercial Companies Law: "2. The partner may not contribute in work rendered unless he is a joint partner. The contribution of the partner may not consist of his having reputation or influence." Under these circumstances, is it possible for the UAE national shareholder to request from the court to cancel the 5% shares of the foreign shareholder and transfer back to him?
Oct 4, 2018
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