“The Employee agrees that for a period of one year following the termination of employment, whether voluntary or involuntary, they shall not directly or indirectly engage in any business, either as an owner, partner, employee, consultant, or in any other capacity, that is in direct competition with the Company’s business. This includes but is not limited to opening, managing, or operating a business of the same nature or joining a competitor within the geographic area in which the Company operates.”
Does that clause look familiar?
Well this is something else you also need to be familiar with: the Contract Acts 1950 Section 28, which states that “Every agreement by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, is to that extend VOID.” With the exceptions, “Saving of agreement not to carry on business of which good-will is sold; of agreement between partners prior to dissolution; or during continuance of partnership,” which are not applicable to most of us employees most of the time.
So, the next time you see such a clause in your employment contract, stay cool.
Remember that the enforceability of non-compete clauses in Malaysia can be questionable, especially in typical resignation scenarios where none of the exceptions apply. Even if you have signed the contract and agreed to the clause, there may not be much the company can do if you decide to pursue opportunities with a competitor.
#ContractsLaw1950 #CareerTips #BebelBimbo
P.S. Also be reminded I am not a lawyer, so It’s always wise to seek legal advice and fully understand your rights and obligations. Stay informed and empowered as you navigate your professional journey 😉
