What legal actions can an employer take against me if I violate a non-compete clause?

Abdallah Shahin - | Business

I have just received a job offer from a Dubai-based corporation. I inked a non-compete agreement with my current employer. What legal actions can be brought against me, and how can I defend myself?

Work in the Emirates
Labor law in the Emirates

It is assumed, based on your questions, that you are presently employed by a mainland employer in Dubai. Accordingly, the provisions of Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations and Cabinet Resolution No. 1 of 2022 on the implementation of Federal Decree-Law No. 33 on the Regulation of Employment Relations apply.

In the UAE, an employer may include a non-competition clause in an employee's employment contract to prohibit the employee from working for a competitor upon the contract's termination. The duration of this non-competition condition cannot exceed two years.

This is in accordance with Article 10(1) of the Employment Law, which states: "Where the employee performs a job that gives him access to the employer's customers or trade secrets, the employer may stipulate in the employment contract that the employee shall not compete with or be engaged in any business that competes with it in the same sector after the contract expires. This clause shall specify the place, time, and nature of the work to the extent required to protect the legitimate business interests, and the non-competition period shall not exceed two years following the contract's expiration.

Labor law in the Emirates
Legal agreement at work

Moreover, in the event of a breach of a non-competition clause outlined in an employment contract by an employee, an employer may be required to file a complaint with the Ministry of Human Resources & Emiratisation in the United Arab Emirates and/or initiate legal proceedings within one year of discovering the breach. According to Article 10.3 of the Employment Law, this is the case.

Despite the inclusion of a non-competition clause in the employment contract, certain employees may be exempt from the non-competition clause due to their profession or designation. This is in accordance with Article 12(5)(c) of Cabinet Resolution No.1 of 2022, which states, "The employee shall be exempt from the non-compete clause specified in Article 10 of the Employment Law under the following conditions:

Any professional categories that are in demand on the national labour market, as determined by the Minister in accordance with the Cabinet-approved classification of employees.

According to the aforementioned legal provisions, you may join the prospective employer if it is not your current employer's competitor. As an employee, it is recommended that you hand over and/or delete all the documents/information contacts of your clients, customers, dealers, suppliers, and colleagues, as well as obtain written confirmation from your employer that you have handed over/deleted all the documents/information in your possession.

In addition, even if you join the prospective employer, you may contemplate joining in a role/designation that is distinct from your current role/designation.

However, even if you join a competitor of your employer, it is the responsibility of your employer to substantiate in court that your employment with the competitor resulted in financial loss. This is in accordance with Article 12(2) of Cabinet Resolution No.1 of 2022, which states, "If a dispute arises over a non-compete clause that cannot be resolved amicably, the matter shall be referred to the judiciary, and the burden of proving the alleged damage shall rest with the employer."

In the event that you join the competitor of your current employer and the current employer is able to prove in a court with jurisdiction in the UAE that your employment with the competitor has caused financial loss to the current employer, you may be required to compensate the current employer according to the court's ruling.

About Author

Abdallah Shahin
Abdallah Shahin
694 Total posts

Read Also

Dubai Real Estate Sector Reports $4.3 Billion in Transactions Last Week

Last week, Dubai's real estate sector saw a remarkable surge in transactions, with a total value exceeding AED15.9 billion ($4.3 billion), according to data released by the Dubai Land Department.

Qatar Real Estate Sector Achieves $110 Million in Weekly Transactions

Qatar's real estate sector recently witnessed a bustling week of transactions, amounting to more than QR398 million ($109.4 million) from June 9 to 13, 2024, according to official data from the Ministry of Justice's Real Estate Registration...

UAE: "Emirates Airlines" and "Flydubai" schedule 4.36 Mn seats for June flights

Data from OAG reveals significant growth in seat capacity for Emirates Airlines and Flydubai ahead of their summer flight schedules. Together, these airlines will offer approximately 4.36 million seats on international flights departing in June 2024....

UAE: First-class football clubs exempt from Dh5-million fines in recent decision

The UAE Football Association (UAEFA) has announced a significant initiative to support First Division clubs by waiving all accumulated fines totaling Dh5 million from previous seasons.

Dubai Unveils Major $78 Mn Reservoir Project to Enhance Water Storage Capacity

The Dubai Electricity and Water Authority (DEWA) has announced the commissioning of a new water reservoir in Enkhali, a strategic move aimed at safeguarding Dubai's water supply in the event of emergencies.

Vietnamese EV manufacturer "VinFast" launches new regional headquarters in Dubai

The Dubai International Chamber has played a pivotal role in supporting VinFast Trading and Production Joint Stock Company, a pioneering electric vehicle manufacturer from Vietnam, in establishing its regional headquarters in Dubai.

Abu Dhabi launches massive $6bn Arabian Hills project on Dubai to Al Ain road

The Arabian Hills Real Estate Development Company proudly unveils its flagship project, the Arabian Hills Estate, marking a significant milestone in the realm of real estate development in Abu Dhabi.

Urgent UAE: Implementing the “noon work ban” starting mid-June

The Ministry of Human Resources and Emiratisation has declared the implementation of a prohibition on working outdoors in direct sunlight and open areas. This ban will be in effect from June 15th until September 15th, between the hours of 12:30 PM...

UAE: 5 potential risks of “remote” work

The UAE Government Cybersecurity Council emphasized the significance of safeguarding the remote work environment, highlighting the potential hazards that users may encounter on their devices. It emphasized the need to deploy robust security measures...

A statement from Sheikh Mohammed bin Rashid regarding work in the private sector

It is His Majesty In the United Arab Emirates, Sheikh Mohammed bin Rashid Al Maktoum, who holds the positions of Vice President, Prime Minister, and Ruler of Dubai, assessed the outcomes of the Emiratization plan implemented in the private sector....

Future Jobs in Emirates: The labor market is a criterion for choosing a field of study

Academic advisors have verified that the labor market has experienced significant transformations in recent years, profoundly impacting university majors. These changes have redirected students' focus towards emerging majors that were previously...

Dubai Police announces 150 vacancies

By announcing the availability of 150 job opportunities for national and reserve service recruits, the Dubai Police General Command is providing these individuals with the opportunity to become part of an innovative and advanced police work...

UAE jobs: Emirates hotels provide 4,000 new jobs

The best hotels in the Emirates provide employment opportunities for thousands of job seekers. job seekers in the uae hotels

Dubai: A company made 16 of its workers millionaires in their honor

In Dubai, a company has made sixteen of its employees millionaires in their honor.

Dubai Court: Worker compensation of 500 thousand UAE dirhams

The Dubai Civil Court has issued a ruling that mandates a restaurant and two of its supervisors to provide a sum of 500,000 dirhams to a worker who sustained a wrist-level amputation as a result of their right hand slipping into a meat-mincing...

What happens after applying for a work permit in Canada?

Prior to coming to Canada, it is necessary to submit an application for a work permit. Foreign workers who wish to apply for a visa while located outside of Canada will be required to submit their application to a visa office situated outside of...

UAE: the details of the 10-year golden commercial license for expatriates

The United Arab Emirates has announced a golden commercial license for expatriates that is valid for ten years.

UAE: Important statement to citizens and residents when purchasing from sales outlets

Abdullah Sultan Al Fan Al Shamsi, the Assistant Undersecretary of the Ministry of Economy for the Commercial Control and Governance Sector, emphasized the importance of consumers retaining purchase invoices. This is crucial as these invoices serve as...

Dubai: A fine of 100,000 dirhams will be imposed on the establishment owner who violates the labor law

The Dubai Court of First Instance issued a second ruling against the establishment owner for violating the Emiratisation policy in the "Nafes" program. The owner was fined 100,000 dirhams for engaging in fraudulent Emiratisation practices....

The UAE announces the details of reducing working hours in Ramadan for the public and private sectors

Workers in the private sector will have a two-hour break each day during the holy month of Ramadan, according to an announcement by the country's Ministry of Human Resources and Emiratisation.

UAE: Banks warn against closing credit cards in this case

Banks in the country will close credit cards with balances exceeding the allowed credit limit starting May 1st, as per new terms and conditions sent to customers, a copy of which was obtained by Emirates Today.

UAE: Announcing an increase in gasoline and diesel prices starting in March

The Fuel Prices Monitoring Committee has authorized a rise in gasoline and diesel prices for March 2024, with an increase ranging from 15 to 16 fils per liter for gasoline and 17 fils per liter for diesel compared to February 2024 pricing.

Bitcoin price reaches $60,000 and is approaching its highest level

The price of Bitcoin is close to reaching its highest price, as it is currently at $60,000

UAE: Announcing job opportunities with salaries from 5,000 to 20,000 dirhams

The portal "Kaddar", linked to the Human Resources Department in Ajman, provided job opportunities for citizens in various government and private sectors in the emirate. The Majid Al-Futtaim Group announced 15 job openings with wages...

Canada announces lucrative job opportunities that do not require a certificate

Canada announced that there are many good jobs that can be accessed without a university degree, and these are some of them:

Urgent UAE: Categories excluded from the provisions of the “New Pensions Law”

The General Pensions and Social Security Authority stated that Decree Law No. (57) of 2023 applies to citizens entering the workforce for the first time starting from October 31, 2023, with any employer in the federal government or local...

Urgent UAE: The employer will be fined from 50 thousand dirhams to 200 thousand dirhams in this case

The Ministry of Human Resources and Emiratisation has cautioned private sector businesses and employers not to hire persons without valid work permits from the Ministry, even for trial employment, whether in businesses or as support staff.

Abu Dhabi: Ruling that a female employee is entitled to compensation amounting to 120 thousand dirhams

The Abu Dhabi Family, Civil and Administrative Claims Court mandated a corporation to pay an employee 120,000 dirhams for breaching an employment contract where she was supposed to work for a salary of 37,000 dirhams. After the company requested...

Determine the 10 most wanted jobs and the average salaries for each job