Guidelines on non-competes should propose compensation, target profiles and exceptions
Under Singapore law, non-compete clauses are void unless they protect legitimate employer interests and are reasonable for both parties and the public
NON-COMPETE clauses in employment contracts are a contentious issue. They are meant to safeguard the employer’s legitimate interests, but, if used unreasonably, may stifle job mobility and distort the labour market, creating an imbalance of power in the employer-employee dynamic.
In May 2023, the UK government proposed a three-month statutory limit on non-compete clauses. The US Federal Trade Commission has issued an outright ban, citing concerns about wage suppression and hindrances to innovation and entrepreneurship.
Minister for Manpower Tan See Leng announced in February 2024 that Singapore would develop tripartite guidelines to shape norms regarding non-compete clauses.
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