Restrictive covenants in employment contracts are clauses that protect the employer’s trade secrets, confidential information, and customer relationships during and after employment.
The most common types of restrictive covenants are non-competition and non-solicitation clauses. This article will define them, discuss their enforceability in the UAE, and the legal services related to them in 2024.
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Restrictive Covenants in Employment Contracts UAE Types
Employers in the UAE may include restrictive covenants in work contracts to prevent employees from engaging in certain activities during and after employment.
The two most prevalent types of restrictive covenants are non-competition and non-solicitation clauses.
In the UAE, restrictive covenants in work contracts are governed by the Labour and Commercial Transactions laws.
Non-competition Clauses UAE Employment Contracts
A non-competition clause in a contract of employment in UAE prohibits employees from working for a competitor in the contract restraint period after leaving their current employment.
In accordance with the Labour Law, non-compete clauses are only enforceable for a maximum of two years post-termination. They must be reasonable regarding geographical location, time, and type of work.
This clause protects the employer’s lawful interests, and in the event of a breach, the employer bears the burden of proving damages.
Non-solicitation Clauses in Employment Contracts UAE
A non-solicitation clause in a contract of employment in UAE prevents an employee from soliciting customers or employees of their current employer for a specified period after leaving their employment.
While there is no statutory prevention of solicitation in the UAE, non-solicitation clauses are commonly used as a deterrent.
The Commercial Transactions Law provides a remedy for unfair competition but is challenging to achieve.
Enforcing UAE Employment Agreements Restrictive Covenants
Enforcing restrictive covenants in work contracts can be challenging in the UAE due to the lack of injunctive relief and the burden of proving damages falling on the employer.
The Executive Regulations cap the compensation available to the employer to three months’ total salary, payable by the employee or the new employer, in exchange for waiving the non-compete restriction.
Therefore, restrictive covenants are primarily for deterrent purposes.
Legal services related to UAE employment restrictive covenants
Looking for expert legal guidance on restrictive covenants in your UAE employment contracts? Al Mulla Lawyers offers specialized services tailored to your needs in 2024:
- Comprehensive Review: We thoroughly evaluate your employment contracts to ensure compliance with UAE laws regarding restrictive covenants.
- Customized Solutions: Our legal team crafts bespoke non-compete and non-solicitation clauses that align with your business objectives while safeguarding your interests.
- Enforcement Strategies: Count on us to devise effective enforcement strategies, navigating the complexities of UAE labor and commercial laws to protect your trade secrets and confidential information.
- Litigation Support: Should disputes arise, we offer robust representation in negotiations and court proceedings, advocating for your rights and seeking favorable resolutions.
- Ongoing Compliance: Stay updated on evolving legal requirements with our ongoing support and proactive advice to maintain the enforceability of your restrictive covenants.
Trust Al Mulla Lawyers for expert legal services related to restrictive covenants in employment contracts in the UAE. Contact us today to schedule a consultation and safeguard your business interests effectively.
FAQs about restrictive covenants in work agreements
Conclusion
Restrictive covenants in employment contracts are essential in protecting the lawful interests of employers in the UAE.
Non-competition and non-solicitation clauses are commonly used to prevent employees from working for competitors or soliciting customers and employees.
However, enforcing these clauses can be challenging due to the lack of injunctive relief and the burden of proving damages falling on the employer.
Therefore, restrictive covenants are primarily for deterrent purposes. If you require legal representation or advice concerning employment contracts in the UAE, Al Mulla is the best labour lawyer and legal consultant.
Contact Al Mulla Lawyers today! Click the Whatsapp icon below or visit our Contact Us page.
Find us at these locations:
– Dubai: Deira, Port Saeed, Street 8, City Avenue Building, Office 705-708.
– Abu Dhabi: Corniche Street, Golden Tower, Office 22.
– Ras Al Khaimah: Al Nakheel, Al Maamoura Building (Emirates NBD Bank Building), Fourth Floor.
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A legal consultant specializing in UAE labor law. He regularly publishes articles on the website and writes on various areas of UAE law, with a specific focus on labor law.
