Many have asked, “My contract says I cannot join a competitor. Is it legit?”
Short answer: No.
Under Section 28 of the Contracts Act 1950 (not the Employment Act), any agreement that restrains a person from carrying on a lawful profession, trade, or business is generally void in Malaysia.
That means most non-compete clauses that attempt to stop you from joining a competitor after resignation are not enforceable.
Honestly, in many cases, all these non-compete clauses are inserted more as a deterrent than a legal sustainable restriction.
HOWEVER.
While Section 28 limits restraints of trade, other laws still apply.
The Personal Data Protection Act (PDPA) 2010 regulates the handling of personal data. Taking customer databases, contact lists, or employee data to a new employer may amount to a serious breach.
There is also common law duty of confidentiality. Even if your contract is silent, you are not entitled to misuse confidential information such as pricing structures, business strategies, supplier agreements, or proprietary processes.
And in more serious circumstances, the Penal Code may come into play, particularly where criminal breach of trust is involved.
So to be clear, you are free to join competitors but you are not free to transfer confidential assets, solicit unlawfully, or exploit information obtained in confidence.
Experience belongs to you, but not the company data.
Professional exits matter. Leave with integrity.
xoxoxo, AuntyHR
