When a person accepts a job offer from an employer, he or she is often asked to sign a non-compete agreement during the boarding process that sets certain limits, for whom they are allowed to work, where they can work, or when, after a layoff or resignation, they can start their own business for a certain period of time or for a period of time. An example in the United States of a non-compete case is the purchase of a client list from JCI Jones Chemicals Inc. of JCI Jones Chemicals Inc. for $5.5 million, as well as JCI`s agreement not to compete with the mass paper industry in North or South Carolina for six years. The Federal Trade Commission challenged the validity of the non-competition clause. It submitted that it had eliminated effective, direct and substantial competition between Oltrin and JCI in the market in question; Significantly increase market concentration in sales of mass pine products; and Oltrin s has increased to be able to increase the prices of mass rolling products. It appeared that there was no legitimate commercial objective advanced by the transaction. The question is whether the clause is still valid in light of the Competition Act (PCA) in the Philippines. In other jurisdictions, there have been cases where competition authorities have challenged the validity of the agreement. The likelihood of the authorities applying a non-competition agreement may vary depending on national law and whether the courts deem the restriction appropriate.
For example, a one-year restriction may be considered appropriate for a seller, since there is a risk that the seller may use leads from his or her previous contract. However, a one-year restriction for an engineer working in a high-tech field may be inappropriate, as the rapid nature of the field could render the knowledge of the engineer working out of work obsolete. Unlike the offences themselves illegal, without the need to further examine their actual effects on competition or the intentions of the parties charged with the violation, the offences are subject to a rule analysis. This type of analysis compensates for the competitive advantages against the anti-competitive effects of the litigation or litigation in determining whether it is a breach of competition law. Of course, these two cases have their own unique real parameters, which must be carefully analyzed before being used in a Filipino environment.