UAE | Employment

Tough confidentiality pact can be ignored

Workers have the right to question strict confidentiality agreements with their employer as they could be illegal, a legal source has said.

  • By Samir Salama, Bureau Chief
  • Published: 00:00 June 27, 2005
  • Gulf News

Workers have the right to question strict confidentiality agreements with their employer as they could be illegal, a legal source has said.

Mohammad Ebrahim Al Shaiba, a Dubai-based legal consultant, said employees should refuse to sign tough confidentiality agreements because many employers were abusing the rights of workers.

Some employers were imposing far-reaching confidentiality clauses on them, he said.

"Confidentiality and non-competition agreements must be reasonable in geographic scope and time limitations," said Al Shaiba.

Al Shaiba added the Ministry of Labour and Social Affairs should refer the case to court if a solution cannot be reached.

Dr Nabeel Tahar Tarfa, a physician based in Dubai, said his contract prevented him from taking up any employment (whether paid or unpaid) or working as a consultant with any other company in the UAE for a period of three years from the date of leaving the company.

"Is this clause not excessive in its geographic scope and time limitation?" Dr Tarfa asked.

He added the clause also lacked a competitive factor.

"Would that condition prevent me from taking up a teaching position at the university, or opening up a business in a completely different field?"

Al Shaiba said confidentiality and non-competition clauses, which do not specify the competition factor, were not binding on workers. "To be valid, these clauses must be restricted to time, place and type of work, to the extent which is necessary to protect the legal interests of the employer," he said.

He said the wide scope of Dr Tarfa's contract broke the labour law.

"Since the contract failed to specify the type of competitive job or business, which the worker must not join or open up during a specific period of time, it cannot prevent him from, for instance, taking up a teaching position at a university, or opening up a business in a completely different field," he said.

Al Shaiba said a worker who feels the confidentiality agreement is unfair has the right to refuse to sign it. Furthermore, the law does not obligate a worker to sign this clause at all. The law just allows employers to ask workers to sign these confidentiality agreements and it is up to workers to agree or refuse to sign them.

He said if the worker's contract was terminated as a result of refusing to sign the non-competition agreement, they would be entitled to compensation for arbitrary dismissal however, the law stands short of reinstating a worker in this case.

"It [the agreement] is of particular importance for workers whose jobs enable them to gain knowledge of customer information," a legal consultant at the labour ministry said.

He added confidentiality agreements were applicable to workers who had access to their company's customers or sensitive information.

The employer must be able to show the non-competition agreement is needed to protect trade secrets, or other proprietary information.

UAE Labour Law states if the work assigned to an employee allows him to become acquainted with the employer's clients or familiar with the business's secrets the employer may require him to refrain from competing with him or participating in any enterprise competing with his own from the end of his employment contract.

The law

  • Legal experts say the confidentiality and non-competition agreements must be restricted to time, place and type of work, to the extent which is necessary to protect the legal interests of the employer.
  • The law just allows employers to ask workers to sign these agreements and it is up to workers to agree or refuse to sign them.
  • The confidentiality agreement is applicable to workers who have access to their company's customers or sensitive information.
  • The agreements should clearly define confidential and proprietary information.
  • If any worker discloses trade secrets or confidential information during the agreement's term, the employer will be entitled to sue the worker before the civil court, demanding compensation for any damages incurred.
  • The employer bears the burden of presenting evidence that the damage incurred was caused by that disclosure, according to a legal expert.

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