I am resigning from my job this month as i get a good offer from a competitor to my current employer. I never realized that the employment contract i signed 5 years ago stated that i cannot join a competitior in south east asia for two years. so, i e-mailed Jabatan Tenaga Kerja Malaysia regarding this matter and this is what they replied:-

"syarat yang dikemukakan oleh majikan tuan adalah syarat biasa yang dikemukakan oleh kebanyakan majikan. Jika telah dinyatakan dengan jelas dalam surat perlantikan tuan dan tuan telah menandatangani surat perlantikan tersebut, maka tuan adalah tertakluk pada syarat tersebut. Majikan tuan boleh mengambil tindakan mahkamah terhadap tuan sekiranya tuan melanggar syarat tersebut. Tuan juga perlu manandatangani surat sampingan sekiranya diperlukan."

Any feedback on this. Takutlah macam ni....

Padan Muka tak baca contract baik baik

itulah pasal...but the contact i signed at that time is just for management trainee..trainee ape adehal..sign jelah...now im in the managent post.....but still salary wise not so good...
The question is is this agreement applicable in malaysia. i think is not right...lets say now im an auditor..just to fulfill the agreemen i cannot work as an auditor tempat lain..kena tukar keje jadi janitor?

Did you make it known to your current employer that you will be working for a competitor in your new job?

No. They ask me where i want to go..but i say that not to other competitor.. . But now they want me to write a letter saying that i will not join a competitor before i leave the company....

they are not gonna know anyway

unless its in the gaming industry!!

Seems that they know where im going....im in the auditing line, there are only 11 companies registered in Malaysia, so its quite hard to keep it a secret..

If you're in auditing line and asking you not join another auditing firm is like not letting a doctor practise for two years after quiting from one of the hospitals. Every other hospital is a competition.

Typical company policy here, want to grab you by the balls even after you resign. Honestly, do you have any other options other than auditing companies?

I doubt they will go after you even after they find out. A waste of legal fees for them.

There you go. You have the issue, the cause and the consequences, all in one incomplete sentence.


Yes, of course it's applicable in Malaysia. Non-competitive agreements are applicable everywhere.

If you think it's not right, why did you agree to it & sign the contract?

No, you don't have to be a janitor. But you cannot be employed by a firm that competes with your current firm. So if you're in a Big 4 firm, you can join another Big 4 because it's obvious they are competitors. Most probably the second tier firms as well because they compete in the same field. So join a smaller firm which doesn't compete for the same jobs. Or join a company outside the auditing line altogether. There are many things you can do, you just can't join a competitor.

the contract is not necessarily applicable. I also heard from a lot of people that such non-competitive contract does not apply if your job involve something very specialized. Like in certain job such as auditor. You have to join competitor when your change company. You can't be expected to change your whole career and become IT programmer? You still have to be auditor, right?

No, an auditor can be an accountant, work in a bank, work as an internal auditor in a company etc etc.

To void a non-competitive contract, you have to show that your livelihood is reasonably threatened by the reasonable application of the contract.

If he can earn a reasonable living as anything else besides an auditor in a competing firm, the contract is not unconscionable.

Dear all, whatever it is, i have already make my decision. It is just that i wanna know what are the loophole in the agreement?The agreement says that 2 years cannot work with competitor and within south and south east asia.
Based on the search on the net, in US there are some states that these rules are apllicable and in some states it is void.
I have already work with my company for 5 years. I have achieved so many things here and i dont think i can improve further plus the salary is considered one of the lowest in Msia compared to other competitor. Even when compare to other auditors also my salary is much lower that them.
So is it my fault that i manage to find a better offer and also benefits even though it is from a competitor?
Being an auditor, i dont think that there is any secret trade is so special to the company, as we auditor do our job according to the international standard. the only secret maybe the clients that we have.

Don'd compare malaysia law with US law..

u are working in malaysia then US law are not applicable

i know that i cannot compare us and m'sia.anyone have any expereince on this in malaysia?

In my opinion, there's no loophole. Sounds like it's clearly written and you've signed it. And there's tonnes of jobs an audito can do besides joining a competitor. Looks clearcut to me. You simply have to decide whether they will sue or won't sue if you go ahead to join a competitor. Alternatively, you can try to negotiate to compensate them to release you from the contract.

Ya, this is the right approach: negotiation.

Non-competition clauses are enforcable in Malaysia. It is very common in audit, management consultancy, system integrators and recruitment.

Since alfondz has already made up his mind, I only can say good luck.

the purpose of non competitive agreement is to prevent trade secrets from being spilled to a direct competitor, or to prevent companies of hiring a competitor's staff to gain knowledge of the company's trade secrets.

for example, if one work at intel say as a manufacturing engineer, that person isnt allowed to go work at amd as a manufaturing engineer (if the person signed a no compete agreement prior to being hired at intel)

It is not enforceable if the restriction is too wide. If you're an auditor, and you're not allowed to get a job as an auditor in any other company, then you an never leave your current job. Ever. Until the day you retire. Unless you can afford to take a 2 year break.

It needs to be interpreted much more narrowly than that. An auditor needs to be able to change jobs, without retraining as a doctor.

The restriction also needs to be view from the point of view of the employer. The terms says you cannot work for a competitor of your employer. Not that you cannot work for any firms offering auditing services. There has got to be more than 11 companies in Malaysia doing auditing. Perhaps they are much smaller.

The point of the restriction is to prevent you bring trade secrets to a competitor or bringing your clients along.

I think the main problem is TS has been offered a job at a competitor of his present employer. One of the few the non-compete agreement is specifically aim at. He's phrasing the question in such a way as to show how absurd this restriction is (sorry to be so blunt).

Unless you've specialized to such a degree that the part of auditing you've focussed on is so narrow, it's only possible to get any job in one of those 11 companies, it'll be very difficult for you to get it set aside, and go work for one of the competitors.

hi guys, tx for your feedback. i've checked the contract yesterday and briefly this is waht is written there:-something like this, cannot remember the actual wording.

"In the event of the termination of your service (either by the management or you) - without the official approval of the management to involved in any competiting activities in South and South East Asia for the period of 24 moths after the termination of service"

What is competiting activities really mean? I do not dare ask the management bout this, they will surely suspect sumthing.

I agree with seantang that i can do other things besides being an auditor, but to maintain the auditor status, i still need to be an auditor.if after two years i dont practice it, i have to be requalify.

Do you already have your audit license?

yup..im a registered ISO 9001 auditor with IRCA. to maintain it i have to do a number of audits in a year.

I seriously doubt that they can prevent you from working as an auditor for 2 years. There are thousands of auditors in the country, and they move from one firm to another all the time. If this were true, none of them will ever change jobs.

I suspect a competitor here should be interpreted as much less than "all firms offering auditing services" in SEA. If you don't want to ask your employers, you can ask MIA, IRCA, or any other professional body you belong to.

Ohhh... I thought you were a public accounting auditor. They need licenses from the Ministry of Finance.

ISO auditors... no need license lah since ISO is not a regulated by any statutory body. It's basically just a private activity that companies choose to do.

This post has been edited by seantang: Feb 9 2010, 10:44 PM

Registered ISO 9001 auditor with IRCA - I believe the restriction is narrow enough to enforce the non-competitive agreement. There are not many company offering ISO certification in the market. Knowing the company's pricing strategy or modus operandi for securing a contract is enough for the employer to seek a court action.

So, im supposed that im stuck here forever? the competitor im joining put 6 months period of restrain of trade which to me is quite accepteble.

However, i have a discussion with the GM from another department yesterday. He said, where im going is not a problem be it a competitor or not. As long i remain professional and did not disclose any confidential information bout the company. Does not mean that after two years can talk bad bout your past employer, revaeal all the secrets, approach the clients and all that. Im too nice to do all that .

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This post has been edited by ps3roxor: Jul 25 2019, 10:42 PM

No. the contract stated that you are not allowed to join the competitor in the period of 24 months after termination.

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This post has been edited by ps3roxor: Jul 25 2019, 10:42 PM

Ur opinion is alomst the same as mine...what i've been here for 5 years not sumwhat quite attached to them and i want to leave in good terms.

As for asking the other HR to help, maybe i will talk to them once i join them.

Firstly, don't confuse between non-competition agreement with non-disclosure agreement.

If you have signed a non-disclosure agreement, the industry standard is to refrain you from telling your ex-employer's secret until:

- a court order requests you to reveal.
- the information become public.

If these scenarios don't happen, you suppose to keep the secret to the end of your life. You better check carefully if you have actually signed such an non-disclosure agreement before. A lot of people signed without understanding what it actually mean.

This post has been edited by mentality88: Feb 10 2010, 10:59 PM

i believe if u dont inform your ex employer which company u're going..i guess it should be alright...

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Added on February 11, 2010, 11:27 pmand most importantly, u've been working there for the past 5 years. i believe u have paid off whatever u owe the company.

to the company, it may no longer be worth while to take legal action towards u since the cost is high

This post has been edited by Gravity: Feb 11 2010, 11:27 PM

jtksm reply liao u not sastify?

then go ur employer beg them edit the clause la.

Hi,

How you solve it end up? Does formal employer have right to restrict you work in same client?
What if after you joined the new company, they send you work for same client?
You just perform duty on new company. Does formal employer have right to do so?

Read what is the content inside of any contract is a MUST!

Most of the time, employer have their self-interest only if they want you to sign non-compete agreement. They don't understand situation might change, employee might jump to another competitor company to prolong his expertise and profession. Exchange of skill and learning from each other is a norm nowadays.

On the other way, employer can protect themselves, if their design is copied 100% directly on another company, causing lost of their existing business, and lost of reputation if those design has gone wrong. By that way, case could be investigated, and compensation or forced resignation by law, is deemed reasonable.

However, no worry. Continue to work as your profession in the competitor company, no need to tell anyone too detailed about past job experience. Don't tell your former colleague where you are now. As long as you work professionally, never misuse info and design from previous companies blindly, then it should be ok.

Friend

Suggest u respect the contract.

If cannot then cannot. One way is to seek exception at budi bicara of your employer

Else jump to a non competitor ie bank or something and lay low for a while

2 years is quite excessive but yeah it’s in the contract

If u have the contract u signed earlier u can argue this doesn’t have it and it was not make known to you …can try and then threaten to labour court


But if it has it then even u tea lady also cannot join for 2 years

This thread from 2010 and TS also no log in since 2012.

i'd recommend to consult with the new hiring company.. they probably know better and have "loophole" for u

Generally, in Malaysia, post-employment non-compete clauses in employment contracts are considered void and unenforceable under Section 28 of the Contracts Act 1950. This section states that any agreement that restrains someone from exercising a lawful profession, trade, or business is void to that extent.

It's very late but I will give you an actual case where I 'breached' the non-compete clause by joining a competitor.
Many say must follow the contract but in Malaysia, this is not enforceable. Some more resourceful company may threaten LOD and ask to see you in court but you can just reply this section as per above poster said :



I'm in a business where poaching and joining competitors is very common. All the time this clause is to scare the ignorant, but the really capable ones will just join the competitor. Till today no one was legally sued for breaching this non-compete clause.
Some will threaten saying they will sue under trade secrets act but it's extremely hard to prove unless you blatantly download some secret formula or specs sheet and blatantly hand it to the competitor.

This post has been edited by Mixxomon: May 21 2025, 10:04 AM

You can write a letter with vague statement, i.e. “at the point of time writing this letter, i has no intention to join ….”