A client followed a former employee, is that prohibited competition?

Illustrative photograph by Sasun Bughdaryan Unsplash

A salesperson leaves and a client later uses their new employer. The company may see a lost relationship it worked to build, while the employee may point to the client’s choice or a different offer. Legal assessment starts with the existing obligation, specific conduct and evidence. A previous client relationship alone cannot establish that every move is prohibited competition or disclosure of a trade secret.

Read the noncompetition clause carefully

Article 83 of the Saudi Labor Law permits post-employment noncompetition to protect legitimate interests where the work allows knowledge of customers. The clause must be written and specify time, place and type of work, with a maximum noncompetition period of two years after employment ends. Review its wording, the former role and the new activity instead of assuming a general restriction covers every market and job.

Distinguish customers from confidential information

A customer’s name may be public while company files hold confidential pricing, purchasing plans or negotiations. Assess the information’s nature, commercial value linked to confidentiality and protective measures. The Regulations for the Protection of Confidential Commercial Information address improper acquisition, use and disclosure. Previous contact is not automatically secret, while a protected database should not be dismissed as a list of names.

Identify provable conduct

Review relevant file access, exports and communications to determine whether protected information was used or conduct falls within a valid clause. A supplier change alone does not explain why the customer moved. Price, service and customer choice may interact. Collect evidence lawfully, respecting privacy and avoiding public accusations or compensation demands that fail to connect loss to the alleged act.

Build protection before departure

Identify sensitive information and access rights, tailor clauses to the role and use exit procedures to recover property, close access appropriately and preserve logs. Review confidentiality commitments separately from noncompetition, with their own conditions. The latter’s duration should not automatically be applied to every other duty. Distinguish usable professional experience from protected information.

Track deadlines and suitable remedies

Article 83 contains a special claim period running from discovery of a breach of its obligations. Record that date and assess applicability early. Depending on evidence, options may include stopping use of protected information, settlement or litigation, weighing cost, harm and continuing business relationships without promising to prohibit all competition or recover every customer.

The provision permits a claim within one year of discovering the employee’s breach of an obligation in the article, subject to checking the discovery date and applicability to the claim.

• Written clause with defined scope
• Protected information and real confidentiality measures
• Proven act, loss and documented discovery date

Identify the obligation, information, conduct and evidence before making a claim. Appropriate clauses, practical controls and legal review protect legitimate interests while respecting both parties’ rights.

General educational content, not a substitute for advice on your facts and documents, and not a guarantee of any outcome.

Translations refer to Saudi law, consult the official legal text when applying it.