UAE Business Owner Sues Ex-Worker for Opening Company Next Door

A woman who owns a laundry shop in UAE filed a lawsuit in Fujairah Federal Court, seeking the closure of a competing laundry business opened by her former employee.

She claimed that, after resigning, he opened a similar business nearby, diverting many of her customers. She is demanding Dh100,000 in compensation for financial losses and lost profits, citing “unfair competition.”

The plaintiff alleges that her former employee, previously hired for ironing, was familiar with the shop’s client base and trade secrets. She requested the court to order the defendant to close his business and compensate her for the damages caused by this alleged unfair competition.

While reviewing the case, the court noted that competition alone does not imply liability; it must be coupled with fault by the competing party. The plaintiff sought an order requiring both the new business and its owner to close operations, cancel the business registration, and jointly pay Dh100,000 for the financial harm she experienced.

However, the court found no evidence to support her claims. There was no indication that the defendants had used unlawful methods, created confusion between the businesses, or harmed the plaintiff’s clientele. The court noted that an accounting expert report in criminal case No. 38 of 2023 showed no embezzlement or illegal conduct. Lacking evidence of fault or unfair competition, the court dismissed the lawsuit and ordered the plaintiff to bear the fees, expenses, and attorney’s costs.