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Management Agreements

Secure Leadership Success with Custom Management Agreements

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Employment Agreements

Share Option Plans

Main Labor Matters Support Management Agreements

Management agreement is essential for higher management as it provides clarity on additional responsibilities, outlines specific liabilities, and incorporates tailored financial incentives.

This ensures alignment between the company’s expectations and the executive’s contributions while fostering a mutually beneficial relationship.

When hiring employees in the UAE, free zones typically provide a standard employment agreement.

Standardized agreements often fail to address the specific terms and requirements mutually agreed upon by the employer and employee, especially the terms required for senior management.

To address these gaps, it is necessary to execute additional agreement, which is especially important for senior management.

Such additional agreements typically provide for:

additional responsibilities unique to the role,
tailored compensation mechanisms,
restrictive covenants to safeguard the company’s interests and align with UAE legal requirements.

Key Considerations

Duration & Termination

Start and end dates of the agreement with provisions for automatic renewal where applicable.
Termination clauses in line with UAE Labor Law and commercial practices, including required notice periods.

Liabilities & Indemnities

Allocation of risk and indemnities that align with UAE legal standards.
Considerations for the UAE’s Civil Transactions Law in case of disputes or liabilities.

Restrictive Covenants

Management agreements often include protective covenants such as non-compete, non-solicitation, and confidentiality clauses to safeguard businesses' interests and protect sensitive information.

Non-Compete Clauses

Prevent managers from engaging in similar businesses for up to two years within a defined geographical area.
A non-compete clause must be explicitly stated in the employment contract and agreed upon by both parties.
An employer must have a legitimate business interest to protect, such as trade secrets, confidential information, or customer relationships.
The respective restriction period should not exceed two years from the date of contract termination.
The clause should specify the geographic area where the employee is restricted from competing, limited to regions where the employer operates or has significant business interests.
Prohibited activities should be clearly defined and directly related to the work performed by the employee, ensuring the restriction is necessary to protect the employer's legitimate interests.

Non-Solicitation Clauses

Prohibit soliciting employees, clients, or customers to safeguard business relationships.
Clearly define the duration of the restriction to ensure it is reasonable and enforceable.
Specify the scope of prohibited activities to avoid ambiguity and align with the employer’s business interests.

Confidentiality Obligations

Protect sensitive information, often extending beyond employment, with penalties for breaches.
Confidentiality terms must be explicitly outlined in the employment contract or a separate NDA.
Obligations may extend indefinitely, especially for trade secrets or sensitive information.
Disclosure is allowed only in specific cases, such as legal requirements or public records.
Consequences for breaches may include termination, damages, or legal action.
Confidentiality obligations should extend beyond employment termination.

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