Muscat: The law sets clear boundaries on what former employees can and cannot do after ending their contracts—particularly when it comes to working with rival businesses.

Article 69 of the Labour Law states that it is permissible for employers and employees to mutually agree on a non-compete clause, which would prevent the worker from joining a competing business after their contract ends. This restriction applies if the employee had access to trade secrets or client data during their employment.

However, the law imposes strict limits on such agreements. The non-compete clause must clearly define the duration (not exceeding two years), the location, and the type of work covered by the restriction. Additionally, the geographical area must be limited to where the employer actively conducts business operations.

Importantly, an employer cannot enforce this clause if the worker was terminated without cause or if the employer’s actions justified the employee’s resignation. The clause is only valid when clearly documented and mutually agreed upon during the employment period.