On entrenched employees, exasperated employers, and restricting re-employment: part 1.

If you're an employee, and your employment contract contains clauses restricting you from working in the same industry after you leave:

This post is for you.

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I've had an recent uptick in enquiries on non-compete clauses (a.k.a. restrictive covenants), likely due to:

a) the Lazada retrenchments, in which ex-employees cried foul about being bound by such clauses;¹
b) the Shopee case, in which Shopee failed to obtain court orders against an ex-employee who joined ByteDance;² and
c) the Manpower Minister's announcement that guidelines on such clauses are being finalised.³

I suspect that there are employees out there who:

a) stay in sub-optimal jobs because they fear being sued over such clauses;
b) turn down good job offers because the new employment contract contains such a clause which they do not want to be bound by;
c) blindly accept such clauses when accepting new jobs because they fail to consider what will happen when they eventually move on; or
d) throw caution to the wind and quit to join a competitor because their cousin's friend's colleague⁴ told them that such clauses are not enforceable.

The common thread that runs through these scenarios is that employees are making decisions without obtaining advice on whether the clause in their case is enforceable.

This is not ideal.

I know that many people think that it's too expensive to obtain legal advice.

But that's not necessarily the case.

I often offer a fixed fee arrangement, under which I charge a flat fee for:

a) a detailed review of the employment agreement and the non-compete clause(s);
b) a careful consideration of case law and legal authorities, in order to come to a reasoned conclusion on the likelihood that the clause is enforceable;⁵ and
c) a face-to-face / video conferencing / telephone consultation at which I advise the employee on the chances of the employee successfully enforcing the clause.

This allows employees to better decide whether to take up a new job offer.

Where the job offer means a pay increment, better benefits, or better quality of life, the legal advice usually pays for itself in a matter of months, tops.

Where the advice stops the employee from doing something rash that exposes them to the risk of a lawsuit, the return on investment is ten-fold or hundred-fold.⁶

And I'm better able to offer such services to employees now, since I'm practicing in a conflicts-free chambers setting.⁷

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I end off with a word of encouragement:

Employees, don't suffer in silence.

If your current or new employment contract contains such a clause:

Reach out.

If you know someone in this situation:

Pass on my contact.

And feel free to repost this, if you think that someone in your network would benefit.

For employers who feel left out:

Don't fret! The next post is for you.