Non-compete Clauses In Thailand?

[robjonesbkk]

Hi,

I'm new to this forum but must say thanks to all who run and contribute as its a fantastic resource!

I am based here in Bangkok and I signed a non-compete clause with my employer when I first joined a few years ago as it was part of my employment contract and I just wanted to get on with getting the job!

The clause states that I will not work for a competitor for 12 months after leaving the company.

Does anyone have any experience with such clauses? How would the Thai labour laws view such a clause? I am aware that in different countries such clauses are not binding.

Any suggestions would be greatly appreciated or even the name of a lawyer with experience in such matters that I could contact.

Thanks again.

Robert.

[N47HAN]

Hi,

I'm new to this forum but must say thanks to all who run and contribute as its a fantastic resource!

I am based here in Bangkok and I signed a non-compete clause with my employer when I first joined a few years ago as it was part of my employment contract and I just wanted to get on with getting the job!

The clause states that I will not work for a competitor for 12 months after leaving the company.

Does anyone have any experience with such clauses? How would the Thai labour laws view such a clause? I am aware that in different countries such clauses are not binding.

Any suggestions would be greatly appreciated or even the name of a lawyer with experience in such matters that I could contact.

Thanks again.

Robert.

Hi Robert,

As it happens I am just preparing to go to court (9am this moring) for the exact same thing.

I too signed a non-compete clause ( mine was for 3 years) so that I had employment.

As it turned out the "employer" was a complete @!#$#@# A## and didnt know his A#@! from his elbow , He managed to totally destroy the buisiness single handed and people were looking at me as the point of contact .

It came to a head last year and we parted company, at this time I started on my own. Since then the company has become very succusfull in a short space of time.

He has been asking for money for some time and I have flatly refused, resulting in him taking me court for the non-compete clause.

So to sum up , reckon I'll be able to give exact advice later today !

Wish me luck

[robjonesbkk]

Sounds like you are going to have interesting day N47HAN! 

Congratulations on biting the bullet and doing your own thing and being successful at it.

Good luck - I sincerely hope you get the outcome that you desire. 

Keep us posted!

Thanks,

Robert.

[soundman]

Hi Robert,

As it happens I am just preparing to go to court (9am this moring) for the exact same thing.

I too signed a non-compete clause ( mine was for 3 years) so that I had employment.

As it turned out the "employer" was a complete @!#$#@# A## and didnt know his A#@! from his elbow , He managed to totally destroy the buisiness single handed and people were looking at me as the point of contact .

It came to a head last year and we parted company, at this time I started on my own. Since then the company has become very succusfull in a short space of time.

He has been asking for money for some time and I have flatly refused, resulting in him taking me court for the non-compete clause.

So to sum up , reckon I'll be able to give exact advice later today !

Wish me luck

Please do keep us posted as to the outcome.

On a tangent to this dilemma:

I have been toying with the idea of putting a non-copying type clause on the back of sales invoices.

I have many problems with companies who sell/use my products initially buying a new design for a few months & then running off to another company who will build them cheaper.

If I notice a product of my design, however not built by me in their hire inventories I want to be able to have some legal recourse because they are effectively stealing my IP work/rights.

Soundman.

[cclub75]

I am based here in Bangkok and I signed a non-compete clause with my employer when I first joined a few years ago as it was part of my employment contract and I just wanted to get on with getting the job!

Robert.

Here are my personal views, from the other side of the fence.

In our company, we do have non competition clause in the working agreements for sales people.

First : i think that thai staff don't really "grasp" the concept. I had some many stories about it... They sign. Sure. But after, it's another story

2 categories : thoses who don't understand. And thoses who understand but... don't care.

We have 1 case currently in court.

The point is :

I would say that when we go to court it's only to show to the other employees that we do care, and that we'll go until the end of the process.

It's more like a deterrence.

However, do not expect a non competition clause to be fully protective. I mean : if one of your staff has decided to stabb you in the back... he will find ways (by using a proxy for instance, his name will not appear on the competitor's payroll, but he will provide all the confidential informations) etc.

Court processes take time. Even though you win, and the ex employee must pay a fine... it will be low and probably the ex employee won't be able to pay.

To sum'up : non competition clause are compulsory... but do not expect too much of it...

Edited September 28, 2007 by cclub75

[N47HAN]

Ok so here goes...

I must point out at this point that all sides of a story must be listened too and mine is only mine , However what I am about to write is as fair and unbiased as possible from me. Sure the D*!^@# will have an opinion that differs to mine but this summary will be the truth. You all may make up your own mind and opinion from it and I would welcome ALL opinions and comments.

3 years ago I lived in BKK and came into contact with the owner of a company that had recently started here. This was in the exact same field of buisiness I was at the time working for in the UK ( for the previous 14 years to be exact )

It became quite obvious that I did not expect this particular industry to be availiable here , and he did not expect someone to have extensive knowledge of this particular industry willing to re-locate for a Thai salary.

I was able to do this at the time as I had no strings to tie up back home. So over a few months I decided to move out and try the emerging market place here.

I was working directly for this company for several months in Bkk , when they informed that they had recently organised a franchise in Phuket and would I be willing to re-locate there and work for their agent .

As the market place in Phuket was more favourable for long term buisiness and financial gain i decided to do so..............................

THATS WHERE IT WENT TO S$%#...............

The franchise owner knew nothing about the buisiness whatsover and basic gave me the keys to the office and said away you go......

My salary came down from 50k to 30k a month immediatley, but I had made the move and was too late to change.

I accepted this fact and moved on beleiving my expertise and knowledge of the buisiness would quickly return financial gain.

As the buisiness started to obtain orders and cash flow increased greatly ( turnover of millions THB per month ) I expected my salary to increase from the meagre 30k to at least a respectable amount.

THIS NEVER TRANSPIRED untill on one fatefull day when I was due to get married I needed an advance , this I received ( 150,000 THB ).I went away got married came back to a world of problems from the companies customers.

It transpired that the deposits received by the company for products were not being forwaded to the guys back in bkk so they refused to deliver product to the franchise.

Me being the contact of the company these customers were looking to me for an answer, and all i could say was speak to the owner he has the deposits and should of ordered your product but hasnt!

It came to a head when a particular customer paid a depositof 1,500,000 THB and had not received the product and enquired about it. On doing so it came to light the owner of the company had taken the deosit but not ordered any product from bkk , ( god only knows where the mney went).

This customer needed his product , the owner hadnt done anything about them receiving it and this customer was in the S&^* with no product.

I explained this to the customer ,they tried contacting the owner without success and approached me to see if I could talk to the guys in bkk to get things back on track for them.

After trying to reason with the owner it became apparent i could do nothing to help through him , my only option was to deal direct with the customer and the company in bkk. In order to do this I had to start my own company to be legalally allowed to do anything.

This I did , got the customer back on track and was offered the franchise from the company in bkk. I took this of course and all customers that were pending or allready with the company concerened either cancelled altogher and chose someone else or orderd with myself.

The crux of all this was today at court..........................

He claimed I had broken my no-competition clause with the company by completing this customers order and "taking " the other customers with me.

THE JUDGES DECISION IN MY CASE>

NO I AM NOT IN COMPETITION WITH HIM > HE CAUSED THIS BY HIS OWN ACTIONS>

PAYMENT AGREED OF 150,000THB to be paid monthly at 5,000

VERY IMPORTANT NOTE..............

This was not imposed by the court but an offer from my lawyers . Had the case gone through to fruition the likelyhood was I have no case to answer against my previous employer. HOWEVER my legal bills could easily mount to more. So the decision was made , UNWILLINGLY to pay them.

SO THE OUTCOME OF THE NON-COMPETITION CLAUSE.................

Although this is indeed a legal clause to put into an employment contract ,aswell as the time period there must also be a figure attached to the clause.IF not it is meaningless as the defendant can claim a figure no lower than 1,000THB whereas the em[ployer has to prove an amount.

AND the responce from the court today was most definatley .. WE HAVE BETTER THINGS TO DO THAN TIE UP COURT TIME WITH THESE ISSUES. SETTLE NOW THROUGH ARBITRATION OR THIS WILL GO FOR A VERY LONG TIME !.

P.s

My company now employs both Thai and Farang and will never put into place a competetiion clause in any of its employment contracts. It is futile and unenforceable.

well thats about it !

christ my longest bloody post ever on TV

[soundman]

Ok so here goes...

<snip>

well thats about it !

christ my longest bloody post ever on TV

Thank you for taking the time to summarise the situation. Much appreciated.

A moral of this story (from an employer's point of view) is that in any legal binding contract have it written by a lawyer & checked by another!

Soundman.

[N47HAN]

Ok so here goes...

<snip>

well thats about it !

christ my longest bloody post ever on TV

Thank you for taking the time to summarise the situation. Much appreciated.

A moral of this story (from an employer's point of view) is that in any legal binding contract have it written by a lawyer & checked by another!

Soundman.

And now as an employer I must agree !

[solo siam]

These clauses don't hold much value in the West, the view tends to be that enforcing them would take away your opportunity to earn a living if employment with the current employer is terminated.

[MaximumSecurity]

Contrary to appearances, there are laws and a competant and credible court system in Thailand, so get a good lawyer who comes recommended by someone whose judgement you trust.

As an example, my first Thai lawyer, who was also a partner in a business, cheated me in conjunction with a third partner, an American. It took three years, but my lawyers got him disbarred. I'm still after the other guy.

"Beware the fury of the patient man" (John Dryden)

Hi,

I'm new to this forum but must say thanks to all who run and contribute as its a fantastic resource!

I am based here in Bangkok and I signed a non-compete clause with my employer when I first joined a few years ago as it was part of my employment contract and I just wanted to get on with getting the job!

The clause states that I will not work for a competitor for 12 months after leaving the company.

Does anyone have any experience with such clauses? How would the Thai labour laws view such a clause? I am aware that in different countries such clauses are not binding.

Any suggestions would be greatly appreciated or even the name of a lawyer with experience in such matters that I could contact.

Thanks again.

Robert.

[N47HAN]

"Beware the fury of the patient man" (John Dryden)

Sooooooooooooooooooooo True

[RedCardinal]

This I did , got the customer back on track and was offered the franchise from the company in bkk. I took this of course and all customers that were pending or allready with the company concerened either cancelled altogher and chose someone else or orderd with myself...

Interesting tale.

Very curious now as to what you sell?

[N47HAN]

This I did , got the customer back on track and was offered the franchise from the company in bkk. I took this of course and all customers that were pending or allready with the company concerened either cancelled altogher and chose someone else or orderd with myself...

Interesting tale.

Very curious now as to what you sell?

Now that would be telling

Pretty sure theres a few members who know though.