Shopee lawsuit loss sparks debate on noncompetition clauses

Shopee’s recent lawsuit against a former senior employee in its Singapore and Brazil offices has trained the spotlight on noncompetition clauses.

The Singapore-based ecommerce major’s case against Lim Teck Yong was dismissed by a judge in the city-state last week.

Image credit: Timmy Loen

The company sued Lim, who was executive director of operations position at Shopee Brazil, for joining ByteDance in 2023 – a move that allegedly breached noncompetition and nonsolicitation restrictions in his employment contract. Shopee sought injunctions to stop Lim from working for the Chinese tech giant and to prevent him from soliciting Shopee clients and employees.

Since the judgment on lawsuit was handed down, Singapore’s Manpower Minister Tan See Leng announced that legal guidelines on restraint of trade clauses should be finalized in the second half of this year.

Tech in Asia spoke to experts from the human resources, public relations, and legal fields to get their reactions to the case. Their replies were edited for clarity and length.

Leigh McKiernon, founder/president director at StratEx

Photo credit: Leigh McKiernon

Leigh McKiernon is a C-level headhunter in Indonesia with 17 years of experience in executive search and organizational consulting.

Without getting into the specifics of this case, I’ll say I’m not a fan of noncompetition clauses. They’re the corporate world’s version of “If I can’t have you, no one can.”

They present a smorgasbord of legal, ethical, and hair-pulling complexities for everyone involved.

Why do companies include these clauses? One reason companies give is that they’re pumping valuable resources into training employees.

By resources, they mean two-hour seminars on how to leverage synergistic paradigms to streamline workflow. In layman’s terms, that means how to make pointless meetings shorter by talking faster.