Work contracts alone may not stop employees from joining competitors

The most effective way to stop talented employees from joining a competitor is to ensure that they enjoy working with you so much that they will stay until it is time to retire.

- Tan Ooi Boon

Short of doing that, there is little you can do to prevent an exodus of talent, because employment contracts stating that an employee cannot work for a competitor for 12 months, for example, usually do not stand up in law.

This is probably why many companies would rather put departing senior executives on "gardening leave" for three months or so to prevent them from working elsewhere, as they are still on full pay.

There is a reason why restraint of trade clauses are generally frowned upon by the courts: Many companies are overzealous when drafting terms restricting employees from joining a "direct or indirect competitor" for a fixed period.

Such terms are usually deemed invalid as they have the effect of preventing any form of employment for the departing worker.

It is also unreasonable because it is hard to know whether a particular company is an indirect competitor due to the varied nature of business.

Moreover, a blanket prohibition makes no sense in cases where a worker signs up for a different job. For instance, a sales manager may join a competitor as a logistics manager who does not engage in sales.