Inappropriate Use of the Non-compete Clause

ANTO COMETA

One of the major violations committed by a lot of companies in the country is the use (or misuse) of the non-compete clause in the job contracts given to newly hired employees. A non-compete clause is a proviso used by companies to primarily protect its business from competitors such as disclosure of valuable information central to the operations or essential details that define the merchandise or goods of the business. It is an agreement wherein the employee is not allowed to engage in a similar profession or trade in competition against the company for a certain period.

This particular condition could only be used or is applicable only to those occupying key positions in the organization. Those key positions are those who have or possess by virtue of their function the trade secret(s) of the business such as management level positions and those whose function(s) are deemed crucial to the product or service as dictated by the nature of the business. However, the abovementioned clause is very much exploited (if I may use the word in the context of over utilization) as a lot of organizations predominantly those who tend to impose such across all positions (primarily rank and file posts) in their organization. If the said clause is to be required or used as a “security bond” to those workers who do not fall under the category of having the business’ trade secret it is deemed as an infringement of the right of the worker. This in conflict with the stipulation set forth by the Philippine Labor Code Article 12b which asserts that every individual desiring to work either locally or abroad should be given protection by securing the best employment terms and conditions.

Preventing the worker to fully realize his or her value and potential by limiting the marketability of the individual is a blind alley not only for the firm but also has a distressing impact on the country. Limiting the worker to find a job after leaving the organization could lead to unemployment. It is more of a deterrent than what is said to protect the business from loosing its footing in the market. It increases the social costs as well as hampers the growth and development of the country’s economy.