Questions & Answers
Non-compete clauses in the employment contract
Dear Sir,
I'm Satheesh from Abu Dhabi. For the past 3 years, I was working for a free zone company in Dubai. Our company have clients from both Dubai and Abu Dhabi and doing medical billing services for hospitals and medical centres.
I was working with one of the company's clients which is a government hospital in Abu Dhabi (please note - govt is removing our company by Sept.).
My concern is that the hospital is interested to recruit me as their employee. But I already signed a limited contract with my company which has "Non-competition non-solicitation agreement".
My contract states that I cannot join their clients or competitors for 24 months after my visa expiry or end of service. If I violate this law they will take legal actions and they can ask for compensation (Law no. 8 of 1980 for UAE and Law no. 5 of 1985 for Dubai).
My visa is expiring by Aug 25th, so I'd like to join there.
Can I join this Abu Dhabi government hospital or not? If I join, is there any legal issue I have to face from my company?
Dear Sir/Madam,
Please note that my response to your question will be purely from an academic point of view based on the limited preliminary information that has been provided.
Therefore, it should not be treated as a legal opinion for the want of adequate knowledge and review of relevant documents when reviewed with the applicable laws.
According to Art. 127 of the UAE Labour Law, it is lawful to have non-compete clauses in the employment contract whereby the employee is restricted, post-termination, to work for the employer’s competitors.
However, in order for a non-compete clause to be valid, it needs to be limited in terms of time, place and type of work and to such extent as may be necessary to protect the lawful interests of the employer.
Therefore, we will have to review your employment contract, and the non-compete clause to understand whether the restrictions imposed on you are lawful.
