previous episode of this series, Mayer Brown JSM discussed the
implication of non-solicitation arrangements with competitors.
After mulling over what he has learned, Colin wonders if the
Competition Ordinance would affect a very common aspect of his HR
Colin: Would the Competition Ordinance affect the
restrictive covenants in our employment contract with
Mayer Brown JSM: The short answer to your
question is "no". The Competition Ordinance will not
affect the restrictive covenants in your employment contract with
staff as long as they are reasonable, proportionate and necessary
to protect your legitimate business interests, such as your trade
secrets and client contacts.
A restrictive covenant that complies with employment law on
restraints of trade will not fall foul of competition law.
In contrast, a non-solicitation agreement or arrangement between
two or more competitors is a horizontal agreement.
Except in the context of a proposed merger or acquisition of
businesses, a non-solicitation agreement between competitors
generally serves no legitimate business interest that requires
protection by the law. A non-solicitation arrangement amongst
competitors is usually an attempt to restrict the employees'
job mobility and stabilise the employers' labour costs. This
type of conduct is anti-competitive.
Mayer Brown is a global legal services organization
comprising legal practices that are separate entities (the Mayer
Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a
limited liability partnership established in the United States;
Mayer Brown International LLP, a limited liability partnership
incorporated in England and Wales; Mayer Brown JSM, a Hong Kong
partnership, and its associated entities in Asia; and Tauil &
Chequer Advogados, a Brazilian law partnership with which Mayer
Brown is associated. "Mayer Brown" and the Mayer Brown
logo are the trademarks of the Mayer Brown Practices in their
This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications
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One of the most debated issues in an employment agreement is the legality of restrictive covenant provisions, such as a non-compete clause which prevents employees from working for a competitor upon termination of their employment agreement.
Following approval by Tynwald at its May 2016 sitting, the Isle of Man Government Department of Health and Social Care has issued guidance for businesses on matters to be taken into account in determining questions relating to the definition of disability.
The Minister of Labour last week issued three ministerial decrees due to take effect from 1 January 2016
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