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[movingup]

Hi to all,

I am working for a company in Thailand which have offices here and also in the UK. The company are wanting me to sign a contract which states that I cannot work for a competitor for 12 months after I finish working for my present employer.

Would this stand up in Thailand or would it be disregarded?

I appreciate any suggestions feedback and also any lawyers over here who may specialise in this.

Thanks

[Soutpeel]

Restraint of trade clauses for employees are very difficult to enforce anywhere in the world simply because you cannot deprive someone of a livelyhood and this is how a court of law would see it as well.

If for example they wanted to invoke this legally, they would have to pay you not to join the completitors company for the 12 month period.

This sort of clause is applicable to say someone selling a company to another company and the owner may not be permitted to set up another company in the same business for a period of time, but in this case the owner has been "paid" not to do it, ie the monies received for the company.

With that being said, if you left the first company and took with you customer lists or other "inside" information from the previous company which could be used at the new company to gain a business advantage, then they could have you in court for that.

IMHO, the clause would not be enforceable if you are an employee merely changing jobs.

[DonaldBattles]

Your agreement to not compete and not work for a competitor is legal and binding. A contract is a contract as long as it has a place and time. The only question is whether or not you company would try to enforce it.

[Soutpeel]

Your agreement to not compete and not work for a competitor is legal and binding. A contract is a contract as long as it has a place and time. The only question is whether or not you company would try to enforce it.

I completely disagree, as an employee of a company, how can you be prevented from earning a living because of a restraint of trade clause. ?

These sorts of clauses are enforceable/binding between companies, not between an employer and employee.

If the OP's company wants him to stay out of the business for a period of 12 months, then he needs compensating for the 12 months

Although not in Thailand or UK, I went to a similar process many years ago, were a company I worked for tried this cr*p on me and was thrown out of court, because in the judges opinion you cannot deprive somebody of a livelyhood, and if the company concerned didnt want me working in the business for a period of 6 months per conditions of employment contract, then they would need to pay me full salary for the 6 months.

If I then chose to work for an other company after being "compensated", they could get me into court, but could only sue for the amount they had paid me.

[mrgreg]

Agree with Soutpeel.

Plus what exactly is your job description in Thai in your WP? Often, it is something different from what you are actually doing in order to circumvent FBA. Your old company does not know what your new job description is, and because of that and above mentionned reasons it is very unlikely it will sue you...

[givenall]

Your agreement to not compete and not work for a competitor is legal and binding. A contract is a contract as long as it has a place and time. The only question is whether or not you company would try to enforce it.

Good luck enforcing this contact afterall this is Thailand

[ProThaiExpat]

Generalizations are dangerous, especially when discussing legal issues. Clearly, key executives with intimate knowledge of a business can be contractually limited in joining a direct competitor and taking his knowledge of his former employer to its competitor for a reasonable amount of time.

On the other hand, an employee who has no knowledge of company operations, products or other information that would benefit a competitor and harm his former employer would probably not be restrained by a court. Keep in mind, by the time one got the matter to court, especially in Thailand, the immediate harm would have occurred and you would mostly be responding to a claim for damages. Very difficult to prove the knowledge transferred actually harmed old employers business.

A restraining order might be attempted, but once again time would be against the former employer. Contractual "confidentiality" clauses are quite common, especially in Australia, where the employee is restrained from sharing knowledge learned from from former employer.

Clearly, restricting a departing employee from working for a direct competitor in a similar job is not restricting one from making a living or from working in any job or for any company other than a direct competitor and in a similar job one left.

[zaphodbeeblebrox]

Non-compete clauses are enforceable so long as they are reasonable as to location and duration. 1 year is not unreasonable, but you don't indicate a location restriction. Assuming you are based in Bangkok, a non-compete clause might be enforceable up to 100km from your workplace. If there is no location restriction term in the contract, the court might impose one, or prohibit enforcement because it is too vague.

[movingup]

Thanks for your responses.

Can I just say that there are no clauses that dictate about working in any areas. It is simply a cause that says you cannot work for any competitor or else you may be taken to court.

Clauses in contracts that stipulate that you cannot approach existing clients I see as fair. But withstanding you from working from a competitor is not fair. I know this would not stand up in a UK court as this is seen as unreasonable grounds and if an employer doesn't want an ex employee working for a competitor then they would put you on gardening leave which means you are given your full salaray until the end of that gardening leave.

What I don't know is the thai laws of enforcing these laws if any?

This company are known for their scare tactics and they like to employ their staff through UK or Thai law depending on their mood.

Because it is an Internet Marketing company it is very hard to put a fair rule in place as the world is your market place.

In response to zaphodbeeblebrox - a 1 year non compete may seem unreasonable - but how about if this is what my skills are? and there are no jobs other than this available? Within the contract there are no restrictions of area of trade? Is it unreasonable to work for another company? No it's not. But in Thai Law what are the rules?

Again thank you for your replies.

[zaphodbeeblebrox]

In response to zaphodbeeblebrox - a 1 year non compete may seem unreasonable - but how about if this is what my skills are? and there are no jobs other than this available? Within the contract there are no restrictions of area of trade? Is it unreasonable to work for another company? No it's not. But in Thai Law what are the rules?

If you want to objectively analyze your legal position with respect to this contract, you better first forget all your preconceived notions and beliefs. I can tell from what you've written so far that most of them are wrong.

First, consider the position of the parties. Where is your employer domiciled? Where is the company's principal place of business? Where was the employment agreement entered into? According to the employment agreement, where is your workplace situated? Is that where you have actually performed most of the work under the agreement?

Next, take a look at the employment contract. Is there a binding arbitration clause which would deprive any court of jurisdiction over a case brought under the contract? Does the contract have a choice of law provision?

Then, take a look at your situation. Where do you plan to work? What kind of work will you be doing? Are you going to use any training or information obtained from your prior employment in your new position? If so, will you be working for a direct competitor of your former employer? If you are going to freelance, are you going to solicit business from any of your former employer's clients?

Finally, look at it from your former employer's perspective. Is this employee damaging my company's market share or competitiveness sufficiently that the former employer would be willing to expend substantial resources trying to enforce a legally discouraged contract provision?

Now, let's get to the legal analysis. First, non-compete clauses (something which used to be known as restraint of trade) are heavily discouraged and will be interpreted as narrowly as possible for the purpose of protecting an employer's trade secrets. Accordingly, the length of time and the range of restriction are duly limited to what is reasonable. It's obvious from your posts above that you are looking for a black-and-white answer. Sorry, you're not going to get one. Not in the U.S., not in Thailand, and not even in the UK (your prior summation of UK law is inaccurate. http://www.gillhams.com/dictionary/310.cfm ) While the non-restraint laws have their origin in the UK, the UK now heavily relies on US law with respect to the enforceability of an non-competition agreement. Freedom to work is an important right, and a court is only going to interfere with that right where an employee has taken property (trade secrets, work processes, training, etc.) from one employer and gone immediately to a competitor of that employer and used that information in a way that puts the former employer at a competitive disadvantage. In the US and UK, the courts may also consider the relative bargaining position of the parties to determine whether the reach of a non-compete agreement is fair.

Moving on to Thailand you are entering even murkier waters. First, is the contract subject to enforcement in Thailand? That's why you need to run through the analysis at the top of my post. Next, you're not going to find any mention of non-compete clauses in the Thai commercial code. Have a look yourself: Comm'l and Civil code part 2; Comm'l and Civil code part 3. There is really no body of precedent in Thai law, because there are no reporting services. The courts in Thailand tend to take a balancing approach between the statutory code/ministerial regulations and the Thai constitution. Guess what? the Thai Constitution changed as a result of the coup, and there isn't much there to protect you Moreover, query whether it would even apply so as to afford any protections to a farang. You could also look to the Labor Protection Act, but I can tell you there's nothing there protecting you either. Finally, consider that Thai courts tend to enforce bargained contract provisions. They don't usually reject adhesion contracts for unconscionability like they do in the UK and US.

So, it all comes down to whether you, as the employee, are going to exploit the information and processes obtained through your former employment to the detriment of your former employer? That's your decision, and you now know the consequences. Sorry, no cut and dry answers. It all depends on how much you will use processes gained through your former employment and to what extent you are going to compete with your former employer.