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In some employment contracts, there is a non-compete clause that limits an employee from moving to a competitor. How does this impact your career?
Jonathan Yuen, head of Commercial Litigation and Employment (Disputes) at Rajah & Tann Asia, breaks it down.
Here’s an excerpt from the podcast:
Tiffany Ang:
I’m just thinking, at the point of applying for the job, we negotiate the pay package and everything, and then they give me the contract. Often, I’m not going to have a lawyer friend look at it. Even if my lawyer friend flags up, “Clause number 13 is not going to be beneficial for you, because it’s the non-compete clause”, I’d go back to the company and say, “Could you please take it out?”
From the worker’s point of view, 10 out of 10 (times), HR is going to go, “Sorry, this is a templated contract, so either you take it or leave it.” So, someone like me, what can I do then?
Jonathan Yuen:
I think that a lot of employees don’t realise their worth. I’m not saying that all employees are malignant. I’m saying that a lot of HR people are just running on inertia. “This is the template I have; my predecessors used it and I’m using it.”
If you think about it, isn’t that such a disingenuous answer? It’s not the thinking person’s answer. And you should ask and say, “Well, why? I’m not sure why I need to have a non-compete (clause),” and part of this is your interaction with the company that allows you to understand the culture of this company.
Tiffany:
Red flag.
Jonathan:
Red flag right? I think employees should not put themselves in a box too often.
They should respectfully but genuinely question why certain bits of their contract should or should not be there. Employees, as well as employers, need to also understand their self-worth in the market. At the end of the day, it’s a negotiation between two parties, right? Willing buyer, willing seller.
Likewise, if you’re the employer, and you have this employee who’s challenging every clause in your contract, you’re thinking, do I want this person? I mean, she hasn’t even started, and she’s already questioning everything and tearing my contract apart. Now, of course, while the employer understands that maybe it could be written better, I suppose at the end of the day, it’s about the way you communicate your queries, right?
Instead of being antagonistic and confrontational, be respectful and truly genuine in seeking an answer to find (out) if a compromise can be reached.
Gerald Tan:
I think the key word here is a compromise. I like what Jonathan said about not coming across as confrontational. I think most job seekers at that stage feel that they have very little to negotiate on because they want to secure the job. They want the employee to say yes and sign off the contract. But I think if today we would exercise what Jonathan said about the worth that we have and seek to maybe make the contract better and compromise, that’s ideal.
But the realist side of me again goes back to many employers who would just say, “You know what, I’ll give the contract to another person who would accept whatever I put.”
So, I think everyone needs to move together with this same mindset. It would influence employers to look at contracts not just merely as templates, but really as something that they should do properly for every employee.
Jonathan:
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