Letter of Demand from Former Employer: What to Do in Singapore

Letter of Demand from Former Employer: What Employees Should Know

A letter of demand from a former employer can be stressful. We recently advised a former sales manager who received one. The sender was a Singapore company that took over his original employer’s business. It alleged that he kept confidential customer information. It also claimed that he breached a one-year non-compete clause by joining a competitor. As a result, it demanded that he resign from his new role, admit liability, and pay damages and legal costs.

Key issues in this case

This matter raises three issues that employees often face when changing jobs.

• First, can a successor company enforce an employment contract that the employee signed with the previous business owner?
• Second, is a non-compete clause with no geographic limit enforceable under Singapore law?
• Third, how long do confidentiality obligations last after employment ends?

What to do if you receive a letter of demand

Restrictive covenants in Singapore are not automatically enforceable. Courts uphold them only if they protect a legitimate business interest and are reasonable in scope. Therefore, seek legal advice early if you receive a letter of demand from a former employer. Do this before you respond or take any action.