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Is a non-compete clause enforceable in Thailand after resigning from a job?
Non-compete ClauseWork ContractsThai Labor LawVisa and Work PermitExpat Employment IssuesThailand Employment Law
Aug 4, 2024
2 years ago
Don *********
ORIGINAL POSTERSomething else question please.
A good friend has been working for a large food distribution company in Bangkok. She has now left this company and has been offered a similar job for a different company (in the same industry) in Phuket.
Her contract with the original company states that she cannot work for a competitor for 2 years.
My question is: can anyone offer an opinion whether this is likely to be legally enforceable, or just hot air.
In Oz this would be considered an unreasonable restraint of trade and not legally enforceable, but TIT…
A good friend has been working for a large food distribution company in Bangkok. She has now left this company and has been offered a similar job for a different company (in the same industry) in Phuket.
Her contract with the original company states that she cannot work for a competitor for 2 years.
My question is: can anyone offer an opinion whether this is likely to be legally enforceable, or just hot air.
In Oz this would be considered an unreasonable restraint of trade and not legally enforceable, but TIT…
TLDR : Answer Summary
The question concerns the enforceability of a non-compete clause in an employment contract after an employee has resigned from a position in Thailand. According to various comments, non-compete agreements are legally binding in Thailand, unlike in some other countries where they may be seen as unreasonable restraints of trade. Some commenters suggest that these clauses can be negotiated or waived and emphasize the importance of legal advice. The situation is complicated by the requirement for the employee to obtain a new work permit and comply with visa regulations, since her previous work permit would no longer be valid after leaving her job.
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Brian **************
Can’t deny someone the right to make a living
Contracts like this almost never enforced but in Thailand and few Baht to the right people who knows?
Should be asking a legal expert not FB
Contracts like this almost never enforced but in Thailand and few Baht to the right people who knows?
Should be asking a legal expert not FB
Don *********
ORIGINAL POSTER@Brian *************
yes, of course she should - trouble is most times you get “it depends” advice (which often leaves you more confused than when starting)Neil ******
@Don ********
"It depends" from a lawyer with all the relevant information is much better than anything from someone else who doesn't know the laws.Reply to
Neil ******
Reply
Nongnuch ********
it could be rated as being an "immoral contract". Such contracts, despite being signed, are not valid. They won't stand a court verdict. You should invest some money in getting legal advice.
Jo **********
Under what circumstances did she leave the company? was she fired, did she leave on her own? It’s legally enforceable but that’s not important it’s whether they will do anything because it’s difficult to pursue
Don *********
ORIGINAL POSTER@Jo *********
she resigned after pretty much being worked to exhaustion for 2 years - all very amicable and she’s still spending an hour or two each day supporting her replacement (unpaid of course)Reply to
Don *********
Reply
Phil *******
Surely if 1 company operates in Bangkok, the other in Phuket then there isn't an issue of competition.
Don *********
ORIGINAL POSTER@Phil ******
the Bangkok company also operates in PhuketReply to
Don *********
Reply
Greta *****
So you're saying that the law in Australia is more loose than in Thailand? Who would have thought that? 🤔
Pun *****
It’s legally enforceable here. I have seen cases of ex employees sued by their former employers for not complying with this clause. She had better negotiate with her employer if it can be waived.
Tim *********
Former HR guy from UK here. We used them for senior positions only, like owners of businesses a client had bought had non-compete clauses and, given the cost of buying the business, no one could complain they had to work to live. But we absolutely knew we could not enforce that on employees.
Maybe a more immediate issue here is whether you can stay in Thailand while a new work permit is sorted out. If you have left the Bangkok job, your work permit and visa are no longer valid and you ought to leave Thailand within a day or two. Then your new employer in Phuket should support your application for a new work permit and visa
Maybe a more immediate issue here is whether you can stay in Thailand while a new work permit is sorted out. If you have left the Bangkok job, your work permit and visa are no longer valid and you ought to leave Thailand within a day or two. Then your new employer in Phuket should support your application for a new work permit and visa
Mikolai ********
Honest answer - talk to a lawyer.
Anecdotal - I've been facing this in the EU multiple times as an IT contractor. In private conversations everybody would say the same thing - it's not enforceable, noone can force you to give up your only way of making a living for a long period of time. In the beginning of my career I had this type of clause in my contracts a few times and it was never enforced. People generally understand, that someone who's forced to stay will not make a good and productive employee, so they just let you go if you want to. Later in my career I simply refused to sign unless such clauses were taken out.
Anecdotal - I've been facing this in the EU multiple times as an IT contractor. In private conversations everybody would say the same thing - it's not enforceable, noone can force you to give up your only way of making a living for a long period of time. In the beginning of my career I had this type of clause in my contracts a few times and it was never enforced. People generally understand, that someone who's forced to stay will not make a good and productive employee, so they just let you go if you want to. Later in my career I simply refused to sign unless such clauses were taken out.
Ralph *******
Legally enforceable.
Steve *******
I've had similar clauses in my contracts in Europe, and every time me or anyone else left for a competitor, we just had a talk with the original employer and had them agree to waive the clause on paper, as a good will gesture.
So she could try talking to her current employer first and see if they're okay with it.
So she could try talking to her current employer first and see if they're okay with it.
Faye *********
If your friend pops into the department of work and labour, shows them the contract and explains the new job then they will be able to say for sure.
Frank-Steven ***********
In more legally mature countries, a non-compete clause would only be allowed in conjunction with adequate paid compensation for the duration of the clause - i.e. getting paid even after the work was terminated. That is why it isn’t all too often used in the west. No idea if Thailand had such kind of protection of the individual in mind.
Manuel *********
Non compete is legally binding
“It is legal to prohibit an employee from engaging in a competing business either “directly” or “indirectly.” Furthermore, a non-competition agreement could state that the employee is prohibited from “being involved with”, whether directly or indirectly, the development of products and services for a competing company which are the same as the products and services that the employee worked on during his or her time working for the employer.”
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“It is legal to prohibit an employee from engaging in a competing business either “directly” or “indirectly.” Furthermore, a non-competition agreement could state that the employee is prohibited from “being involved with”, whether directly or indirectly, the development of products and services for a competing company which are the same as the products and services that the employee worked on during his or her time working for the employer.”
Phil ******
@Don ********
its legally enforceableReply to
Phil ******
Reply
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