Team moves in Singapore: How to avoid the pitfalls

In a team move, any wrongdoing by a team member could potentially implicate the other colleagues who leave with them, and even the new employer.

This collective exposure is a common risk for team moves in Singapore, according to Desmond Chng, Director of Dispute Resolution at Drew & Napier LLC.

Apart from complying with their own contractual obligations, those involved in a team move should also be mindful that any breaches or wrongdoing by others within the team may risk potential liability for the entire team and the new employer.

"The employees involved in a team move and the new employer could potentially be held liable for breaches by others in the team," Desmond explains.

"For example, if a team member is found to have wrongfully taken confidential information or solicited business away from the employer in breach of her employment contract, the other members of the team move, and the new employer may run the risk of being held liable for conspiring to commit those breaches."

This framework makes due diligence essential. Employees considering group departures must understand not just whether their own conduct complies with restrictions, but should ensure that the other team members' actions do not expose them to conspiracy claims.

Similarly, employers that are recruiting a team should be vigilant that the incoming team complies with its obligations owed to the former employers.

When courts will intervene

When it comes to post-employment restrictions, Singapore courts require employers to demonstrate that the restrictions genuinely protect business interests rather than simply preventing competition.

"In Singapore, the courts will uphold clauses that are necessary and reasonable to protect the employer's legitimate proprietary interests in maintaining a stable workforce, trade connections, and trade secrets," Desmond says.

For restrictions against the non-solicitation of other employees, the Singapore courts will intervene only if the team dynamics are such that the employee, for example, as a team leader or manager, developed influence over the other employees.

"If a team leader has developed influence over her team members by working closely with them over a period of time, her employer can seek to enforce a non-solicitation clause to prevent her from poaching or soliciting her team members to leave and join a competitor with her in a team move."

The emphasis on "developed influence" matters. Courts look for evidence of actual influence that would give rise to an unfair advantage, and employees are not otherwise prevented from leaving as a group to pursue new opportunities.

Why more restrictions can mean less protection

Many employers believe comprehensive contracts (containing confidentiality clauses, non-solicitation provisions, non-dealing restrictions, and non-compete clauses) provide layered security. Courts see it differently and have criticized such an approach.

"When considering whether a post-termination restriction is enforceable, the courts will consider if there are any other restrictions that already protect the employer's legitimate proprietary interests," Desmond explains.

If there is overlap, the broader restriction may be subject to challenge.

"If the employer is already protected by a non-solicitation or confidentiality clause, the employer will face difficulty in enforcing any further and broader restrictions, such as a non-dealing clause that prohibits any kind of dealing (and not just solicitation) with a customer or employee, or a non-compete clause that prohibits the employee from joining the competitor altogether."

This means non-compete clauses may be more difficult to enforce where narrower restrictions already exist. If there are confidentiality and non-solicitation provisions, courts may view the additional prohibitions as unreasonable and unenforceable.

But an exception may be emerging. "However, there has been the suggestion that such non-dealing or non-compete clauses could arguably still be reasonable if the non-solicitation or confidential clauses are not enough to protect the employer's legitimate interests, such as where the non-solicitation or confidentiality clauses are difficult to police or enforce."

If courts accept that there are significant difficulties in enforcing the narrower restrictions, employers could potentially justify the broader restrictions on the basis that detecting breaches and enforcing the narrower restrictions is not feasible in practice.

The restriction must match the role

Standard-form restrictions applied uniformly across all employees are common, but they may also be more difficult to enforce.

"Employers should ensure that each non-solicitation clause is tailored and calibrated to be proportionate to each employee's role and area of responsibility," Desmond says.

"Otherwise, a standard form non-solicitation clause that is included in all employment contracts, including for the most junior employees who do not have managerial or client-facing roles, will likely face significant challenges when it comes to enforcement."

Courts scrutinize whether the scope, geography, and duration align with what employees are responsible for during their employment.

"The courts will look at how the scope, geographical area and duration of the restriction relate to the employee's role," Desmond explains.

"For example, the court will consider whether the employee had a client-facing role such that she would have developed influence over customers and a non-solicitation restriction would be necessary to protect the employer's legitimate proprietary interest in the customer relationships."

A disconnect between restriction and role can be fatal to the employer’s case. "If the employee held a junior role and was limited to the Singapore market, the court would see a longer restriction that prevented her from soliciting customers anywhere around the world as overly restrictive."

Beyond this, courts also examine the commercial context. "The courts will also consider whether the employee received additional payment for agreeing to the restriction, and whether it was negotiated between the parties," Desmond notes.

Additional compensation signals that the restrictions were accepted as fair and reasonable between the parties, strengthening enforceability.

What you can do while still employed

The legal framework shifts dramatically between conduct during employment and actions after termination. Understanding the obligations owed to the employer in the different stages is essential for employees planning departures.

"Employees owe duties of good faith and loyalty to their employer. Therefore, while they are still employees, they cannot assist a competitor by soliciting customers for the competitor," Desmond explains.

"However, they are not prevented from taking steps to pursue new opportunities, such as attending a job interview with a competitor."

Post-termination, the calculus changes entirely. "On the other hand, after the employment has come to an end, the employee is free to compete unless there are post-employment restrictions. However, such restrictions are enforceable only if reasonable and do not go beyond what is necessary to protect the employer's legitimate proprietary interests."

Employees often get into trouble because they prematurely begin to take steps to compete when their employment has yet to come to an end, such as when they are on garden leave.

Where disputes arise and how they are resolved

Team move litigation concentrates in sectors where specific conditions converge: fierce talent competition, high employee mobility, team-based work structures, client-facing roles, and access to confidential information.

"Team moves disputes often arise in industries where there is fierce competition for talent and where talent is also very mobile, such as in the financial, technology and professional services sectors," Desmond says.

"This is especially where the work is team-based, client-facing, and involves confidential and proprietary information."

Employers typically act swiftly. "Employers will seek to take preventative steps to protect their legitimate proprietary interests, including by applying for interim injunctions to enforce restrictions and put a stop to the wrongdoing."

In this regard, forensic evidence of any wrongdoing by the leaving employees will be critical to the employers’ case.

These interim applications provide some indication on the merits of the case and can be helpful to both sides in assessing litigation prospects and coming to a settlement.

"At this stage, parties will get an early indication of whether the court is likely to enforce the restrictions, and this often informs the parties' discussions for an amicable resolution," Desmond notes.

The challenges of cross-border and remote work

Cross-border remote work introduces new enforceability considerations, particularly around geographical scope.

When employees work across multiple markets from remote locations, broader territorial restrictions will be necessary.

"With more employees taking on remote work that covers multiple markets for businesses that are increasingly cross-border, we may see restrictions with a wider geographical scope being enforced," Desmond observes.

But geography also creates procedural complexity. "This also means multi-jurisdictional disputes that may require enforcement in foreign jurisdictions, including injunctions."

Remote arrangements thus cut both ways: potentially supporting broader restrictions while complicating enforcement mechanics.

Future developments

"The Singapore courts continue to balance the employee's right to pursue new opportunities with the need to protect the employer's legitimate proprietary interest and prevent unfair competition," Desmond says.

The critical question is whether practical difficulties with the enforcement of narrower restrictions can justify the need for broader restrictions.

"It will be interesting to see if the courts will enforce non-compete clauses on the basis that non-solicitation or confidentiality clauses are difficult to police or enforce."

For employees considering team moves, the message is clear: understand not just your own contractual obligations, but those of everyone departing with you. Someone else's breach could well become your legal problem.

For employers, post-employment restrictions should not be one-size-fits-all. Protection requires precision: clauses must be calibrated to match individual roles, responsibilities, and influence.

They must do no more than necessary to protect genuine business interests rather than prevent future competition.