After a case was dismissed, where an employer sued his ex-employee for joining competitive firm, the court said that restricting employees from working for a competitor is restricting his freedom
There have been many disputes and legal cases for years between employers and employees regarding the restrictions imposed on an employee to work for a rival company.
Many employers have placed bans and restrictions on employees once they completed their end of service period and then chose to work for a competitive firm.
The court of UAE recently ruled that imposing an airtight ban on the employee is “restriction of his liberty” and that if an employee wishes to work for a rival company, a ban should not be imposed.
However, the court also ruled that it is understandable why certain bans have to be occasionally implemented, but they should be extremely specific, only enough to protect the employer’s interests. This may include issues such as inside secret knowledge of the company that the employer fears the employee may reveal or if an employee had left during a crucially critical time of the company, etc.
Furthermore, these specific bans should be mentioned in the contract terms at the beginning of employment and cannot simply be implemented later.
This new ruling was initiated since a court case came up where an employer was seeking damages from his ex employee for a total of AED 5 million, because the employee had violated the contract and joined a rival company before the period of two years once he left his previous company.
However, the court dismissed the case as there was no documented proof that the employee had caused the company any financial losses or stress.