non compete clause amendment for regular employees

last year a couple of people resigned. since then employees have been given amended contracts to sign with a non-compete clause added. i have yet to receive mine. it was really explained why it was added and as far as i know there is no valuable consideration included. i only know of an additional 5 vacation leaves awarded when you reach 5 years of tenure. would that be considered valuable consideration?

from what i know it states the time of 1 year and place of the philippines. the reasonable limitation as to trade seems to general to me. it only states "same line of business" as the company. the company is an IT company that caters to the financial services sector. the head office is based in France, so i think this makes the local philippine company a captive BPO subsidiary of the parent compay. is that right?

with the wording of "same line of business", can it be interpreted as any BPO company? if so, would this still be considered a reasonable limitation as to trade?

also, since we were already regular employees we can refuse to sign? is that right? assuming the employee hasn't done anything to void their existing contract.

if there's no mention of penalty and if the company files a case if you violate the clause, would they have to prove that your actions caused the losses or damages that they file for?

i don't want to sign this amended contract, but of course i'm scared of what happens if i don't.

my direct supervisor was recently terminated due to redundancy. they disclosed that our team was overstaffed and his position had been dissolved. what's fishy is that 2 other supervisors with the same designation were not let go, one was promoted to head of our team with a new title and other under him with a different title and will still oversee or handle junior members of the team.

would signing the new contract but having HR acknowledge that i was signing under duress or adding "under duress" after my signature change anything or have any effect? or adding V.C. before my signature?

i think most employees just signed without giving it a second thought. some might have been under the impression that they are required to sign. a few of us are undecided. i'm thinking of either not signing or signing and hope that they don't file a case against me if i do resign and join another company.

i'm sorry if this was too long, but i would appreciate any advice or help. i wouldn't mind referrals to attys who specialize in this. thanks.

hello po, ask ko lang po pag awol po ba makukuha pa yung cash bond ???

neth06 wrote:hello po, ask ko lang po pag awol po ba makukuha pa yung cash bond ???

dapat hindi na. kasi yan nga ang purpose ng cash bond

i only know of an additional 5 vacation leaves awarded when you reach 5 years of tenure. would that be considered valuable consideration? yes

also, since we were already regular employees we can refuse to sign? is that right? yes

if there's no mention of penalty and if the company files a case if you violate the clause, would they have to prove that your actions caused the losses or damages that they file for? no, they can also file injuctions to prevent you from causing damage

i don't want to sign this amended contract, but of course i'm scared of what happens if i don't.

would signing the new contract but having HR acknowledge that i was signing under duress or adding "under duress" after my signature change anything or have any effect? or adding V.C. before my signature? no this would be worse and can be used against you. could be interpreted that you reaped the benefits while never planning to comply. that is considered fraud and jail time could be imposed. the only way that would work is if you signed and immediately filed a lawsuit/complaint that they forced you to sign while threatening to fire you. the complaint should be filed within a few days.

thanks lukekyle for your insight.

i have a follow up concern. how bout on a quitclaim? if there's something you don't agree with like a non compete clause, can you also decline to sign? if you decline to sign a quitclaim, you would still be entitled to your benefits as per labor law?

pls give yung buong scenario. Why are you being asked to sign a quitclaim?

lukekyle wrote:pls give yung buong scenario.  Why are you being asked to sign a quitclaim?

hi lukekyle, let's say you were terminated via redundancy and after receiving your separation pay the company asks you to sign a quitclaim with a non compete clause. if you don't agree with the non compete clause can you not sign right away and discuss removing that?

Don't sign if you dont agree with the non compete. Once you sign you are bound by it. The employer can insist on the quitclaim but not on the non compete ( unless they were just reiterating a non compete clause in your contract) , especially if you were terminated.

lukekyle wrote:Don't sign if you dont agree with the non compete.  Once you sign you are bound by it.  The employer can insist on the quitclaim but not on the non compete ( unless they were just reiterating a non compete clause in your contract) , especially if you were terminated.

thanks again lukekyle. i thought of another scenario. our annual performance reviews are winding up and we're nearing the time of increases to salary and/or bonuses, if any. if they won't give me my increase and/or bonus unless i sign an the updated contract with the non compete, would i have to forfeit the increase and bonus if i don't want to sign?

dapat hindi but since increases and bonuses are not govt mandated madaling gawan ng paraan para hindi ka mabigyan so in the end either you sign the non compete or you risk not getting salary increases.

lukekyle wrote:dapat hindi but since increases and bonuses are not govt mandated madaling gawan ng paraan para hindi ka mabigyan so in the end either you sign the non compete or you risk not getting salary increases.

hi lukekyle, our hr director has explained to me that the company "is applying for ISO and contract harmonization is one of the things that we need to do in order to comply. Non-Compete clause is a pretty standard language in most contracts and it is something that we need to reflect in employee's contracts globally but the execution should there be a need to will differ from one country to another depending on the practice."

given this looks like they're going to push all employees to have the same contract... for those of us who do not sign our updated contracts, do we face losing our jobs even if there's no breach in our existing contracts?

anyone have info on the ISO standards/requirements that they're trying to meet?

do we face losing our jobs even if there's no breach in our existing contracts? - For current regular employees dapat hindi. A non compete has nothing to do with the current performance of ones duties and functions. Cannot be unilaterally imposed. Although bear in mind that career advancement will probably hit a dead end if one doesn't sign. If ever the company plans to get rid of those who don't sign, they will have to use another reason.

Traditionally making an old employee sign a non-compete comes with an increase in salary or a promotion.

Yes ISO standards do push for contract harmonization but non compete is not a requirement nor the standard. Imagine the company driver or janitor being asked to sign a non compete. You may politely suggest that the non compete clause be included in a separate document so it doesn't mess up the standard employment contract.

[i]Yes ISO standards do push for contract harmonization but non compete is not a requirement nor the standard. Imagine the company driver or janitor being asked to sign a non compete. You may politely suggest that the non compete clause be included in a separate document so it doesn't mess up the standard employment contract.[/i

Thanks Sir Luke, very insightful. Ongoing na rin yung mga ganitong scenario dito sa current employement ko.

one last thing. promise. our parent company is a software company based in europe that provides trading solutions and such for the financial services industry. the local company is a subsidiary.

1. on my contract, when the "Company" is mentioned it would mean the local company name stated there unless otherwise mentioned?

2. is our local company, in essence, an in-house or captive BPO of our parent company?

3. if so, for purposes of the non compete, would the "line of business" of the company be a BPO?

thanks sir luke for all your responses.

1. cannot say without reading your whole contract.
2. dont know. for this you need to read the sec papers of the parent company and your employer. i would advise na wag mo na pakialaman yan. not your concern.
3. pwede. pwede ring Software/IT company

for posterity, here's the actual clause:

During your employment and within one year after the cessation of your employment with the Company, you agree not to directly or indirectly,

carry on, advise, provide services to or be engaged, concerned or interested in, or associated with, any business or activity which competes with or is in the same line of business carried on by the Company or its related companies, in any capacity (whether as principal agent, partner, employee, shareholder, unit holder, joint ventures, director, trustee, beneficiary, manager, consultant or adviser) within one year from the termination of this employment agreement, anywhere in the Philippines.

now that i read it again it seems all encompassing. you can't even be a shareholder. sobrang kinukulit na ako ng hr director and higher management to sign.

yes dapat naman talaga hindi pwede maging shareholder if bawal ka nga mag work dun. Mas worse kasi pag may equity ka pa

at my previous employer, it's ok to own shares as long as they were publicly traded. one of the big multinational banks. but then, wala silang non compete clause. hehe

i hate the stress that all this is bringing. but even if they've started thinking of ways to terminate me to achieve their contract harmonization, i feel like at this point even if i sign they'd still look for a way to terminate and file a case once i'm working again.

our operations head wants us to speak with the company's legal team. now if this is a lawyer or lawyers. should i also have representation with me? how much are legal fees for something like this?

no need, hear them out first and what they have to say. just dont commit to anything if you are having second thoughts or if you cannot fully understand. dont sign anything unless you are sure