# Non compete/restraint of trade within free zone



## 007ferrari (Jan 7, 2014)

Hi all, I have searched high and low for the specific answer but with laws constantly changing and many different scenarios I would be most grateful for advice on the following:
I am unhappy in my current company as such would like to move (to a competitor). I have several offers already but before I make things formal I would like to know the possible repercussions in terms of restraints of trade/ non compete etc.
Both my current employer and potential new one are based within the same free zone.
I have worked for my current employer for almost 12 months and there is a non compete clause on my contract stating that I cannot compete with my existing company or work for a competing organisation for max 6 months.
Firstly, is this actually enforceable?
Secondly, if so should my existing employer have to continue to pay my salary and benefits of this period ( as they will not allow me to take a wage elsewhere).
Thirdly, as it states a max 6 months I feel that perhaps there would be some lee-way depending on their attitude?
Some articles and comments on this site have stated that it is not possible for an employer to stop someone working for another company within a free zone particularly however there seem to be so many variables.
Your comments would be hugely valuable for my understanding.


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## Chocoholic (Oct 29, 2012)

It really depends if you are going to work for a competitior and take clients with you.

Non-competitive clauses are very hard to enforce, one simple reason for this, is because it's not allowed to prevent someone from making a living from using their USP/or skills.

Plus to enforce these things, they'd have to drag you and the new company through court - very few companies would actually waste the time, energy and money to do this.

No, the current company would not pay you anything for that 6 month period.

Also the new laws which were brought in a few years ago that allwoed people to freely move from one company to another, having completed 2 years, probably overrules any non-competitive clause.

The outcome of things like this, relies greatly on the relationship you have with the company. For example I have moved from one company, to a direct competing one on severals occassions and the non-competitive clause in my contracts had TWO years as the period! BUT because I have a unique USP, it's pretty impossible to enforce, plus I have always had very good working relationships with my bosses and therefore they gave me the gree light to move. On the other hand, I have had workmates, who were a pain in the backside, burned all their bridges, did stupid things and they got globbered when trying to work for a competitive company.


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## cdnxpat (Oct 10, 2009)

007ferrari said:


> Hi all, I have searched high and low for the specific answer but with laws constantly changing and many different scenarios I would be most grateful for advice on the following:
> I am unhappy in my current company as such would like to move (to a competitor). I have several offers already but before I make things formal I would like to know the possible repercussions in terms of restraints of trade/ non compete etc.
> Both my current employer and potential new one are based within the same free zone.
> I have worked for my current employer for almost 12 months and there is a non compete clause on my contract stating that I cannot compete with my existing company or work for a competing organisation for max 6 months.
> ...


May I asked what happened in your case ?


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## NAUAE (Jun 4, 2010)

Hi, I was in a similar situation to yours. I did a lot of research and consulted a lawyer (Also see Tamimi website, there is quite a lot of detail there). Now here is the long and short of it:

For no compete clauses to be enforceable in the UAE, they have to be pretty damn specific and must be fair to the employee. For example, a clause that says that you cannot work for a competitor in the GCC for 12 months is not enforceable as it's too generic and broad but one that says that you can't work for company x, y and z in Dubai for 6 months IS.

The second interesting fact is that no-compete clauses are "injunction" based not retrospective. This means that if you end up joining a competitor, there is nothing that can be done by your current employer except to sue you for damages which is a lose lose for them as they HAVE to prove that they have suffered financial loss through your actions - next to impossible to prove. However, if you haven't, then they can approach the courts to prevent you from joining.

So based on this, your options are:

1) Don't tell them you are going to a competitor. Resign and cancel your visa. Then ask the competitor to get you one. If you do a visa transfer in the same free zone, your employer has to give an NOC for that and they have to mention the name of the company you are transferring to - big no no. When they find out; they can threaten for holding end of service (legal no no for them as they can't) or sue you (you incur some court costs but they will lose and have to pay it) or send nasty letters to your company (which means you need full support of your new company so they dont run scared when it happens)
b) Negotiate an exit package with your current employers i.e. 6 months salary and benefits. You sign a contract that you won't join the competitor during that time. Serve it out and then join. This is neat and clean and both parties get their interests protected

Hope that helps


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## ExpatnKids (May 2, 2014)

My 2 cents, based on personal experience.
All freezones have employment contracts that are pre-drafted by the freezone. Non-compete clauses are part of those contracts. So yes, they are enforceable. I was in a similar situation, and the non-compete clause said that I could not work in a competing firm in that freezone for a period of 1 year. I could however go and get a job in another freezone, or a non-freezone firm. 
However, i had an offer from another company in the same FZ, and my previous employer would not waive the clause (i-e, issue an NOC). I submitted my resignation, and they acknowledged receipt of it...but somehow forced me to stay on for another year. After a year, when they cancelled my visa, they told me that I could not work in a competing firm for another year. I went to my freezone, and showed them a copy of my resignation letter, which was a year old. I raised a complaint with the arbitration committee, and they acknowledged the fact that I in fact, had resigned a year ago, and that even though my firm cancelled my visa just now, my non-compete period would be counted from the time I submitted my resignation. 
Bottom line, talk to the FZ authorities...the arbitration committee..and even your old firm. In most cases, these parties dont want to go to litigation, as it is a money pit as well as time consuming, and will more often than not work on a give-and-take basis, and help you out. Just talk to them.


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