Understanding the situation
A non-compete clause is a contractual term that seeks to limit what an employee may do — such as working for a competitor or starting a similar business — for a period after leaving an employer. These clauses appear in various forms across UAE employment contracts.
Whether a particular clause can be relied on, and to what extent, may depend on a range of factors, including its scope, duration and geography, together with the applicable law. This overview does not set out any specific test, threshold or outcome, as these depend on the individual contract and current legal position.
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Factors that may be relevant
These factors do not operate in isolation, and how they interact in a given case depends on the specific contract and circumstances.
- The scope of the restricted activity described in the clause.
- The duration for which the restriction is stated to apply.
- The geographic area covered by the restriction.
- The nature of the employee's role and the interests the employer seeks to protect.
- The applicable law and how it treats such clauses generally.
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Practical steps
- 1Read the exact wording of any non-compete clause in the employment contract.
- 2Note the scope, duration and geography described in the clause.
- 3Consider how the clause may interact with any new role or business activity being contemplated.
- 4Keep records of any related correspondence with the employer.
- 5Seek advice before acting in a way that might be inconsistent with the clause.
