I am leaving a company for another company which I am already in the middle of processes to join.
However after informing my current company of my departure, they are requiring me to sign a “don’t work for competitors for 1 year clause”.
My next employer deals with similar services, although not the exact same product so I am wondering how enforceable and restrictive signing such a clause can be.
Any thoughts or advice?
My understanding is that non-compete clauses are generally unenforceable in Japan. This article is targeted at English teachers, but the advice should generally hold.
Also, although they can ask you to sign a non-compete agreement upon resignation, I don’t think they can actually require it. This reddit post argues there’s no reason why you should sign it.
I’m not qualified to give legal advise, and so you could consult someone who is if you want a more definite answer.
My personal approach would be to write them in an email that I’m uncomfortable with signing an agreement that potentially exposes me to more liability, but gives me no upside, and asking what the consequences are if I was not to sign it. If they back off, you can leave it at that. If they threaten you, you have something you can take to a lawyer (hence doing it by email).
Thank you. I found a quote of the particular area in the Japanese constitution.
日本国憲法第22条第1項に定められた「職業選択の自由」に照らして判断されます。
Which included in the email may help my position as well.
These types of non compete agreements are very difficult to enforce even in the US and they usually only even try to enforce them for c-suite level employees. I agree with Pau abovel, there’s no reason for you to sign one as you are leaving. Usually companies try to get you to sign them before they hire because that’s when they have the most leverage. Whatever you decide I wish you good luck.
Thank you for the response. When you say “enforceable”, that is under the context that I have signed the agreement and they attempt to restrict my actions?
It seems there are also conditions which determine the validity of the agreement in court such as receiving payment in exchange, my position in the company etc.
If you haven’t signed anything, then nothing is enforceable.
Please do not sign anything, ever, unless you understand the document completely and are sure it provides a strict benefit to you. If you do not understand it, then please consult a professional unrelated to the company.
In fact, there is no reason to sign a document promising your previous company anything if you have already secured your next job.
How can you benefit from signing such a document? Even if the agreement is unenforcible, why would you make it in the first place? At best they don’t follow up, at worst you have to waste your time getting any calm against you dismissed. How does that help you in any way?
Signing a contract with a non compete clause when starting a job is a different matter, but still one to consider. However, signing anything when leaving is a foolish move without proper compensation.
When A contract or part of a contract is unenforcable it means that while the contract is still valid and they can take you to court over any breach of contract the court would throw out the case and you’d not have to suffer the consequences of such a breach of contract, (other than having to go to court so it could be thrown out/dismissed)
My previous company wanted me to sign one as well. I don’t remember quite the content, but it was quite broad and vague. I told them such contract would breach my constitutional rights, and will not sign it. They were like meh. I left the company and got my full compensations, so no issues.