Ask the expert: can I work for the competition?

I work for a private firm in Dubai. There’s a non-compete clause in my Labour contract, which states that, should I resign, I’m not allowed to work for a UAE-based competitor for at least a year. And if I did so, I would face a ban. I have now received an offer from a competing company, and when I told them about the clause, they said they couldn’t help me to resolve the issue. What should I do? Is this legal, please advise?

While non-compete clauses are common in the UAE and are valid and lawful under UAE law, there are limitations on the operation and scope of such clauses.

Under article 127 of the UAE Labour Law and articles 909 and 910 of the Civil Code, the non-compete clause must be reasonable and only applies ‘where the work assigned to the worker allows him to become acquainted with the employer’s clients or to have access to his business secrets’. The agreement must also be ‘confined in terms of time, place and the nature of the business, to the extent necessary to safeguard the employer’s legitimate interests’. In other words, the non-compete clause must be limited in time, geographical scope and the nature of the business sought to be restricted.

In your case, a year might not be considered an unreasonable limitation of duration, but would need to include a sufficiently defined business scope in order to be enforceable (eg, barring you from dealing with existing clients of the employer and/or using confidential information you had acquired during the course of your employment, etc).

Further, there is nothing that prohibits you and your present employer from negotiating a ‘release’ sum, but it would be advisable to ensure that any agreement is in writing and permits you to take up the employment that you have been offered.