Business Protection in the DIFC: The Shield and the Sword
Type
E-journal
Date
16 Oct 2014
Jurisdiction
Dubai International Financial Centre
Taxonomy
Restrictive Covenants & Confidential Information in Employment, Recruitment, Rights & Duties of Employees & Employers
Copyright
LexisNexis
Relevant company
Hadef & Partners
Legal reference
DIFC Law No. 4/2005, DIFC Law No. 7/2005
Analysis
Competition is rife among certain businesses/sectors within the DIFC to the extent that poaching of staff is likely to become a big issue as the market continues to recover from the 2008 global financial crisis. The concerns facing businesses are not just the loss of talented staff and the investment (both time and money) made towards the development of those staff but also the fact that, when they leave, they take with them confidential information and “client connections”. Jamie Liddington (Senior Associate) considers the steps which employers ought to take to mitigate any potential harm and to protect their business in the event of staff defections to competitors.
In brief:
• This article considers only the DIFC legal position and not the position in the wider UAE (or other free zones);
• The best means of protecting legitimate business interests is to have a well drafted contract of employment in place from the outset;
• Where an employee acts in breach of the contract and, in particular, any confidentiality obligation or post termination restriction, the employer may face the prospect of this resulting in significant financial losses;