Ask Gulf News: Can a UAE non-compete apply outside the country?

Question: I resigned from my old company five months ago. I had signed a non-compete and non-disclosure agreement with that company for two years. I was surprised when the company filed a lawsuit against me seeking compensation for losses incurred due to my alleged breach of the non-compete agreement, based on the claim that I attended a meeting outside the UAE with a competitor, where I was introduced as the CEO of that company. My question is, do they have the right in their case? 

Answer: According to Article (10) of Federal Decree Law No. 33 of 2021 (If the work assigned to the worker allows him to gain knowledge of the employer’s clients or have access to its work secrets, the employer may require that the worker, under the employment contract, shall not, after the expiry of the contract, compete with the employer or be engaged in any competing project in the same sector, provided that the requirement is specified in terms of time, place and type of work, to the extent necessary to protect legitimate business interests. The non-competition period shall not be more than two years from the expiry date of the contract.)

 For a non-compete agreement between an employee and an employer to be valid, the prohibition of competition should be relative, meaning it should be restricted by time, place, type of work, and only to the extent that it achieves a legitimate interest for the employer.

An absolute prohibition of competition completely disregards the worker's freedom. Therefore, if the meeting happened outside the UAE, then the non-compete condition loses its validity requirements and is void because it is not permissible for it to extend to another country. Moreover, the company is obligated to provide evidence and specify what secrets you revealed, along with the harm it claims to have suffered as a result of the alleged non-competition.

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