Mishcon de Reya Advises on Drafting UAE Territorial Employment Restrictions

Law firm Mishcon de Reya stated that conventional country-based restrictive covenants are increasingly difficult to apply as senior employees based in the UAE frequently handle multi-country regional responsibilities across the Gulf Cooperation Council (GCC) and the wider Middle East. A Dubai- or DIFC-based employee may manage accounts in Saudi Arabia, Qatar, and Egypt or travel across regional offices, making conventional territorial scopes a common point of dispute.

For UAE mainland employers, post-termination covenants are governed by the UAE Labour Law framework, specifically Article 10. Under this provision, restrictions are recognised in defined circumstances where an employee has access to clients or confidential information, but any enforceable covenant must be strictly limited by time, geographical place, and nature of work. Mishcon de Reya notes that broad GCC-wide non-compete clauses are difficult to justify if the employee's work was strictly local to Dubai or Abu Dhabi.

In financial free zones such as the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), a common-law influenced framework applies. In these jurisdictions, courts evaluate whether a covenant protects a legitimate business interest and extends no further than reasonably necessary. Blanket drafting that restricts competition across the GCC, MENA, or worldwide operations remains vulnerable unless tied directly to the employee's documented responsibilities.

Mishcon de Reya advises regional employers to conduct factual mapping before drafting covenants. This process includes documenting where employees are physically located, which jurisdictions and business lines they cover, what confidential information they access, and which clients they materially influence. Employers are also urged to review covenants when an employee's role changes rather than waiting for disputes to emerge.