Decoding Global Implications of Subcontractor Non-Compete Clauses
The world of agreements is fraught with complexity. The allegedly laden land of subcontractor non-competes is no different. But in the international market… how do they stack up?
Non-compete Clause Subcontractor Agreements Defined
The word non-compete can be used in relation to many different types of contract and agreement. In a nutshell, a non-compete clause is a part of an agreement that prevents one or more of the parties from working elsewhere within a certain industry after the termination of the contract. For example, if a construction company sub-contracts a trade or skill from another private business, they may require that they don’t work for future employers within their industry for a period of time once the contract is complete. It’s a safeguarding method used by companies to maintain their competitive edge. But it does come with a few problems. And there are several pieces of legislation and defence options that can be exercised around it.
Subcontractor Non-compete Agreements in the International Business Environment
There are very few non-compete clauses that are valid cross-regionally. For example, a non-compete clause within the UK (to prevent competition in the EU) would not apply to Australia. Therefore, signing a contract as a subcontractor in Australia would not mean that you couldn’t do the same work elsewhere within the EU.
Internationally, non-compete agreements and their enforceability are not standardised. Some regions have more leeway than others – in places like California, non-compete clauses are almost entirely unenforceable. In the UAE, a non-compete clause is usually enforceable for only one year after an employment contract is terminated, unless specially negotiated at the beginning of a contract. Just across the Arabian Gulf in Saudi Arabia, non-compete clauses are much stricter and involve 5 exclusive years from the date of contract termination and up to three years upon the company who agreed to include it into the contract.
As the global business environment continues to grow and international trade becomes more common, the complexity of implications of subcontractor agreements also increase. For example, does a subcontractor in Saudi Arabia really care what happens in the UK? And how does the employee know if they’re infringing someone in another country? The complexity of determining which laws might apply would make anyone’s head spin.
Implications of Non-compete Clauses
There are many different levels of implications that non-competes can have. It can affect businesses internationally, the local economy and public sector, and those involved on an individual level.
Expert Opinion on Non-compete Clauses
Experts of all kinds can support employees worldwide on the enforceability of your agreement. Whether it’s enforcing your rights or taking a newly funded startup to court, advisors can give you a clear understanding of where you stand and what you should do. For more insights, you can explore this resource.
