Friday, April 8, 2022

Is your contract of employment (non-competition) restricted?

In some countries, during the recruitment process, many employers require new employees to sign an employment contract that includes (placing a restriction) of non-competition. In this contract, the employee agrees (knowingly or without knowledge) not to start a competing business for the company he or to go to work with the competitors, for a period of time, usually this period is written and specified in the employment contract, in addition to determining the geographical area within which it cannot work within its limits after the end of his contractual relationship with the company.


Through this restriction, employers try to maintain their clients in addition to maintaining the secrets of their companies and the experiences they have and keeping their practices and strategies for themselves, where the restricted employment contract (non-competition) allows the company to control the actions of its former employees for a period of time that may sometimes be long after they leave the company, which may severely limit the continuity of employees and access to future jobs in the same field of their previous work. 

Employees of all levels are often required: executives of all levels, sales and finances, and programmers....Signing this type of contract strapped (non-competition) i.e. in short, a non-competition agreement is a contract between the employee/employee, prevents (restricts) the employee from working in the same field as his previous or starting his own business in the same activity as he was working with the company. Here, the contract bound by this (restriction) line must indicate the time period and geographical area as mentioned earlier and which (restricts) the employee's options when seeking a new job in another competing company.

The working system in Saudi Arabia addressed this issue in paragraph 83 25 pages 37, which states:

1. If the work assigned to the worker is allowed to know the employer's clients, the employer may- in order to protect his legitimate interests - the worker may not compete after the end of the contract, and the validity of this condition must be liberated and specific in terms of time, place and type of work and must not exceed two years from the end of the relationship between the parties.

2. If the work assigned to the worker allows him to know the secrets of his work, the employer may - in order to protect his legitimate interests - to require that the worker shall not disclose his secrets after the end of the contract, and the validity of this condition must be liberated and specific, in terms of time, place and type of work. 

3. An exception to the provisions of this system, the employer shall file a claim within one year of the discovery of the employee's violation of any of his obligations contained in this article. 

What will the employee speak if he does not follow or comply with this requirement?)

If the employer (company/enterprise/organisation) wants the employee to follow this (restriction) condition but the employee ignores this, the company can only prevent him from taking a new job by filing a lawsuit with the appropriate courts. This may sound very disturbing, but it may take a long time in the courts (depending on each country's regulations) and can be financially costly for some companies, so companies may ignore this and not prosecute the employee – especially if the restriction is broad and indefinite. Some companies may ignore this requirement in order not to restrict the employee or prevent him from remaining in the same city or region and in the same field that he or she is proficient in. This depends on the understanding and appreciation of human resources departments that place such a requirement in their contracts.

What is the impact of this restriction (non-competition) on employees and on the economy in general?

In some parts of the world, such as California in the United States and some other states that reject such restrictions, they have strong economies, especially in the technology sector, because of the freedom that workers have in their movements that contribute to the dissemination of knowledge and the sharing of experiences. Instead of involving companies in lawsuits, which may be costly to companies, over employees' rights to restricted contracts, instead of limiting the transfer of expertise and knowledge sharing between workers in a sector or industry, and instead of creating a large gap between supply and demand and lack of expertise, companies overlook this limitation and do not place it in the basis of employment contracts.

In conclusion, the circumstances of employees who have signed employment contracts containing such a requirement (restriction) and especially employees with ineffectual positions should be taken into account as much as possible. The thickness of companies with such restrictions contributes to reducing the transmission of expertise and knowledge between companies. It is also important that employees contribute to instilling confidence in the sectors in which they work, respect the ethics of work in order to preserve the interests of the companies they previously worked in and new companies, and not to contribute to the increased frequency of such restrictions on job seekers when hiring.

Now it's your turn. Do you support or oppose its existence?