In modern employment and commercial relationships, protecting legitimate business interests such as customer networks, confidential information, and human resources is essential. One of the mechanisms commonly used to prevent unfair competition is the non-solicitation clause, which restricts a party—usually an employee, former business partner, or agent—from enticing clients or employees away after the relationship ends.
Under Vietnamese law, however, the legal basis and enforceability of non-solicitation clauses remain relatively unclear, especially compared to jurisdictions with a longer tradition of enforcing post-contractual restraints. While not explicitly regulated under the Labour Code or the Civil Code, these clauses are increasingly included in employment contracts, service agreements, and franchise or distribution deals. Their validity depends largely on how they are drafted, the type of agreement they are part of, and the legitimate interests they seek to protect.
1. Legal Framework in Vietnam
Vietnamese law does not explicitly provide for non-solicitation clauses in employment contracts. The Labour Code 2019 emphasizes the rights of employees to freely choose and change employment (Article 5), and any agreement that excessively restricts this right may be considered invalid under the principle of freedom of labor.
However, in civil and commercial contracts, such as service, partnership, or agency agreements, Article 3 of the Civil Code 2015 allows parties to freely agree on contractual terms, provided such terms are not contrary to law or social ethics. This provides a legal basis for parties to negotiate and include non-solicitation obligations, especially in non-employment contexts.
Additionally, confidentiality and non-compete clauses may be used alongside non-solicitation provisions to form a broader strategy for protecting business interests.
2. Scope of Non-Solicitation Clauses
In Vietnam, non-solicitation clauses are generally used to:
- Prevent a former employee or business partner from soliciting or poaching clients of the company;
- Prevent the solicitation of current employees or collaborators;
- Apply within a specific period (often 6–24 months) and, in some cases, within a defined region.
There is no standard form or statutory limit on the duration or scope, but to increase enforceability, these clauses should be:
- Clearly and narrowly defined (e.g., limiting to clients the party had contact with in the last 12 months);
- Reasonable in duration and scope of restriction;
- Accompanied by justifiable interests, such as protection of confidential business information or long-standing client relationships.
3. Enforceability and Court Practice
There is limited precedent from Vietnamese courts on the enforcement of non-solicitation clauses, particularly in employment contracts. Courts tend to be reluctant to enforce clauses that restrict an individual’s right to work or compete, unless:
- The clause is clearly drafted and limited in scope;
- There is evidence of actual harm or unfair interference with business;
- The clause is part of a civil or commercial contract, not an individual labor contract.
In practice, enforcement is more likely in B2B relationships (e.g., between a company and its former distributor or franchisee) than in labor disputes.
Where enforceable, remedies may include contractual damages, injunctions, or termination of the agreement.
4. Best Practices for Drafting in Vietnam
To improve enforceability under Vietnamese law:
- Avoid overbroad restrictions: Do not apply to all potential clients or employees, only those with prior direct contact.
- Define “solicitation” clearly: Include direct communication, recruitment attempts, or indirect actions through third parties.
- Limit the duration: 6 to 12 months is usually considered more reasonable than longer periods.
- Combine with confidentiality clauses: This strengthens the justification for restrictions and aligns with Vietnamese legal values.
- Use in commercial agreements, where freedom of contract is broader than in labor relationships.
Conclusion
Although Vietnamese law does not expressly regulate non-solicitation clauses, they are permissible under the Civil Code framework in most non-employment settings, and may be enforceable if reasonably drafted and grounded in protecting legitimate interests. However, in labor contracts, their use must be carefully evaluated, as courts may view them as infringing upon an employee’s fundamental right to work.
For businesses operating in Vietnam, non-solicitation clauses can still be a valuable tool—especially when used thoughtfully, alongside other protective measures like confidentiality and intellectual property provisions. Legal advice and precise drafting are crucial to ensure the clause stands a chance if challenged.
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