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Non-Compete Clause Singapore: What You Need to Know

In Singapore, a non-compete clause is a common part of employment contracts—especially for senior staff or those with access to sensitive business information. But not all non-compete clauses are legally enforceable.

Here’s a simple guide to help you understand how non-compete clauses in Singapore work.

What Is a Non-Compete Clause?

A non-compete clause is a legal term in your employment contract that prevents you from joining a competitor or starting a similar business after leaving your job. The purpose is to protect your employer’s business interests, such as trade secrets, client relationships, or internal strategies.

Are Non-Compete Clauses Enforceable in Singapore?

Not always. In Singapore, the courts will only enforce a non-compete clause if it is:

Reasonable in duration – Typically between 3 to 12 months.
Reasonable in scope – Limited to roles that directly compete with your former employer.
Reasonable in area – Should only apply to locations where your employer actively does business.
Protecting legitimate business interests – For example, safeguarding confidential information or client connections.

If a clause is too broad or seen as unfair, it may be considered void under Singapore’s legal principles on restraint of trade.

Examples of Unenforceable Clauses

Singapore courts are cautious about overly restrictive clauses. These may be considered unenforceable:

A two-year restriction across the entire industry.
A clause covering regions where your former employer has no operations.
Restrictions applied to junior employees with no access to sensitive information.

Alternatives to a Non-Compete Clause

Employers may also consider:

Non-solicitation clauses – Prevent former staff from approaching clients or colleagues.
Confidentiality clauses – Protect company secrets even after employment ends.

These clauses are generally more enforceable than a broad non-compete clause.

Conclusion

A non-compete clause in Singapore must be clear, fair, and legally justified to be enforceable. If you’re an employer, it’s important to draft such clauses carefully. If you’re an employee, always understand your rights before signing or leaving a job.

At Adel Law LLC, we provide tailored legal advice on employment contracts, including reviewing or challenging non-compete clauses. Whether you’re hiring or moving on from a role, we’re here to help.