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Non Compete Letter

Non Compete Letter Template for Saudi Arabia

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Key Requirements PROMPT example:

Non Compete Letter

"I need a Non-Compete Letter for our departing Chief Technology Officer in the cybersecurity sector, restricting work with competitors across the GCC region for 2 years from January 2025, with special focus on protecting our AI-based security solutions and client relationships."

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Document background
The Non-Compete Letter is a crucial document used in Saudi Arabian business contexts to protect company interests when key employees depart. It is particularly relevant in situations where employees have access to confidential information, trade secrets, customer relationships, or specialized training. The document must comply with Article 83 of the Saudi Labor Law and align with Islamic Sharia principles, typically including specific restrictions on working for competitors, geographical limitations, and duration (usually not exceeding two years). Recent reforms under Saudi Vision 2030 have influenced how these restrictions are structured and enforced. The Non-Compete Letter should be customized based on the employee's role, industry sector, and access to sensitive information, while ensuring the restrictions are reasonable and enforceable under Saudi law.
Suggested Sections

1. Letter Header: Company letterhead, date, and formal addressing of the employee

2. Employee Information: Full identification of the employee including name, ID number, and position

3. Current Employment Context: Brief description of employee's role and access to confidential information/trade secrets

4. Non-Compete Obligations: Clear statement of prohibited competitive activities, including specific industry sectors and roles

5. Geographic Scope: Explicit definition of the geographical area where restrictions apply

6. Duration: Specific time period for the non-compete obligations, ensuring compliance with Saudi law limitations

7. Consideration: Statement of any compensation or benefits provided in exchange for the non-compete obligation

8. Acknowledgment: Employee's confirmation of understanding and acceptance of terms

9. Signature Block: Space for both employer and employee signatures, dates, and witness signatures if required

Optional Sections

1. Confidentiality Obligations: Additional section on maintaining confidentiality, used when the employee has access to sensitive information

2. Non-Solicitation Provisions: Additional restrictions on soliciting customers or employees, included when relevant to the employee's role

3. Specialized Industry Restrictions: Specific restrictions related to particular industry sectors, used for specialized roles

4. International Scope: Additional provisions for cross-border restrictions, used when the employee's influence extends beyond Saudi Arabia

5. Training Compensation: Provisions regarding specialized training costs and obligations, included when the employer has invested in significant training

Suggested Schedules

1. List of Prohibited Competitors: Specific list of companies or organizations considered direct competitors

2. Geographic Restriction Map: Visual representation or detailed list of restricted geographical areas

3. Compensation Schedule: Details of any compensation structure related to the non-compete obligations

4. Confidential Information Summary: General categories of confidential information the employee has had access to

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Confidential Information
Competing Business
Restricted Period
Restricted Territory
Competitive Activity
Trade Secrets
Customer
Business Relationship
Intellectual Property
Company Group
Material Interest
Directly
Legitimate Business Interests
Previous Employment
Specialized Training
Professional Services
Market Area
Business Sector
Proprietary Information
Competitive Products/Services
Direct Competitor
Commercial Relationship
Non-Public Information
Strategic Information
Employee's Position
Relevant Industries

Technology

Healthcare

Financial Services

Professional Services

Manufacturing

Telecommunications

Energy & Oil

Consulting

Retail

Pharmaceuticals

Construction

Engineering

Education & Training

Defense & Security

Media & Entertainment

Relevant Teams

Legal

Human Resources

Sales

Research & Development

Executive Leadership

Product Development

Information Technology

Business Development

Operations

Finance

Marketing

Strategy

Customer Relations

Engineering

Professional Services

Relevant Roles

Chief Executive Officer

Chief Technology Officer

Sales Director

Senior Software Engineer

Research & Development Manager

Business Development Manager

Regional Sales Manager

Product Manager

Technical Lead

Senior Consultant

Financial Controller

Operations Director

Marketing Director

Head of Strategy

Senior Account Manager

Principal Engineer

Department Head

Project Manager

Chief Financial Officer

Vice President

Industries
Saudi Labor Law (Royal Decree No. M/51): Primary legislation governing employment relationships in Saudi Arabia, including provisions for non-compete clauses under Article 83, which allows employers to require employees not to compete with them or work for competing firms after employment ends
Commercial Court Law (Royal Decree No. M/93): Relevant for protecting business interests and trade secrets, particularly in defining what constitutes unfair competition and legitimate business interests
Law of Commercial Courts (Royal Decree No. M/5): Provides framework for dispute resolution in commercial matters, including enforcement of non-compete agreements
Saudi Vision 2030 Labor Reforms: Recent reforms affecting employment relationships and contract terms, including updates to employee mobility and contract restrictions
Anti-Commercial Fraud Law (Royal Decree No. M/19): Relevant for provisions regarding protection of confidential information and trade secrets that often complement non-compete agreements
Sharia Law Principles: Islamic law principles that govern contract formation and enforcement, including concepts of fairness and reasonable restrictions in commercial agreements
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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