Help: employment law and non-compete
Discussion
ORD said:
One thing is for certain, though - the new employer is more likely to be able to spend enough to get a good result than is the OP on his own.
Indeed - hence in the OP's shoes if the new employer were not funding this I would have to look in the introspective mirror and see if this were a good idea.Yes, the old employer may be using 'scare tactics', but that would be a very optimistic hope.
But, even if you play out the commercial logic of that, if they've paid a firm for a letter already, then it seems likely that letters 2 and 3 would come and possibly already discussed as they've been given the 'heads up'.
Also looking at the commercial logic, if they are concerned that even one good client will be poached, they they've got an 'opportunity cost' of not stopping the OP. By that I mean that if Client X is worth £30,000 a year to them, then they may as well invest a relative amount in keeping that client.
Of course, the job may not be worth spending £30,000 to keep for the employee. Indeed, it may not be worth the new employers time/money to get a particular employee too...
Humans are intrinsically set-up to be more concerned about losses than opportunities. If the old employer is scared that they will lose business, then it makes commercial sense to invest sensibly in enforcing their covenants.
INAL and am wondering as I think (unless I missed it) it has not been mentioned, but does one sign two copies of an employment contract these days?
Just wondering as I did do things I know were ruled out by newer contracts with the same employer but were not by mine. I am in any even now retired.
Before anyone says naughty, the main area of naughtiness was mainly done by reverse engineering a public website. My contract pre-dated the web.
Just wondering as I did do things I know were ruled out by newer contracts with the same employer but were not by mine. I am in any even now retired.
Before anyone says naughty, the main area of naughtiness was mainly done by reverse engineering a public website. My contract pre-dated the web.
On other threads it's been well established that such clauses are enforceable, even if they seem a bit unreasonable at first.
Does anyone know if the outcome is just generally and injunction to prevent the employee taking up the post and costs associated with the action?
If the employee doesn't trade with clients/prospects I am struggling to see what the loss is for the first employer.
Does anyone know if the outcome is just generally and injunction to prevent the employee taking up the post and costs associated with the action?
If the employee doesn't trade with clients/prospects I am struggling to see what the loss is for the first employer.
desolate said:
On other threads it's been well established that such clauses are enforceable, even if they seem a bit unreasonable at first.
Does anyone know if the outcome is just generally and injunction to prevent the employee taking up the post and costs associated with the action?
If the employee doesn't trade with clients/prospects I am struggling to see what the loss is for the first employer.
My case was a bit more complicated, but the other side ended up offering about £85k to avoid court, though damage had been done by the time the legal process even started, had the employee stuck to his word and kept away from my customers I would have let the matter drop. Does anyone know if the outcome is just generally and injunction to prevent the employee taking up the post and costs associated with the action?
If the employee doesn't trade with clients/prospects I am struggling to see what the loss is for the first employer.
Slidingpillar said:
INAL and am wondering as I think (unless I missed it) it has not been mentioned, but does one sign two copies of an employment contract these days?
Just wondering as I did do things I know were ruled out by newer contracts with the same employer but were not by mine. I am in any even now retired.
Before anyone says naughty, the main area of naughtiness was mainly done by reverse engineering a public website. My contract pre-dated the web.
No contract of employment has ever had to be in writing, let alone signed. The employer must provide a written statement of some terms, but that need not be and is not always the whole contract. The contract can be made orally, by conduct, by email, in writing, whatever. Just wondering as I did do things I know were ruled out by newer contracts with the same employer but were not by mine. I am in any even now retired.
Before anyone says naughty, the main area of naughtiness was mainly done by reverse engineering a public website. My contract pre-dated the web.
If you are hinting that you faked up a contract that did not reflect what had been agreed, then that makes you a fraudster, so it's not something to brag about. If I have misinterpreted what youa re hinting at, sozzer.
EDIT: I think I did misread what you were hinting at. Perhaps you were saying that you acted in a way that would have breached the contract that a colleague had, but not your own contract. If that is so, no naughtiness. Reverse engineering a product or process can sometimes, however, give rise to a breach of an intellectual property right.
Edited by anonymous-user on Friday 30th October 06:14
desolate said:
On other threads it's been well established that such clauses are enforceable, even if they seem a bit unreasonable at first.
Does anyone know if the outcome is just generally and injunction to prevent the employee taking up the post and costs associated with the action?
If the employee doesn't trade with clients/prospects I am struggling to see what the loss is for the first employer.
An interim injunction is only granted if damages would not be an adequate remedy. It is often not possible to calculate the loss that an employee causes or might cause by breaching a covenant. An injunction is granted, to use a forbidden language, quia timet, which means to prevent the loss happening at all. The idea of the injunction is to prevent the harm, so the grant of the injunction may be a sufficient remedy (plus costs). Does anyone know if the outcome is just generally and injunction to prevent the employee taking up the post and costs associated with the action?
If the employee doesn't trade with clients/prospects I am struggling to see what the loss is for the first employer.
In most cases, the grant or refusal of an injunction ends the case, BUT employers are increasingly electing not to seek injunctions and electing instead to seek damages. This can sometimes be more effective than seeking an injunction, because obtaining an injunction involves uncertain discretionary issues, and even when granted the injunction can be hard to police effectively. Suing all the way to judgment for damages can be a more effective way of nailing the employee, and sending a message to the troops.
In some cases an account of profits is awarded (rare in most cases, but not uncommon if an employee starts up a new business in competition with the former employer and does so using purloined databases and/or business secrets). The damages awarded are sometimes what are called Wrotham Park or negotiation damages. The Court assesses what it thinks should have been the commercial price of the wronged party consenting to the wrongdoing party doing whatever it did. In other words, an enforced royalty fee.
Anyone near University College, Dublin at 0830 tomorrow can pop in and hear me give a lecture on Wrotham Park damages and other aspects of restrictive covenants and garden leave law. PLUG: third edition of big dull book out next spring.
Breadvan72 said:
Anyone near University College, Dublin at 0830 tomorrow can pop in and hear me give a lecture on Wrotham Park damages and other aspects of restrictive covenants and garden leave law. PLUG: third edition of big dull book out next spring.
BV - whilst employees are free to enter or not enter a contract, do you think we have the right balance in place at the moment?I work a lot with California based US firms where non-competes peaked and are now (mostly) struck out aside from some statute restrictions.
Vaud said:
Breadvan72 said:
Anyone near University College, Dublin at 0830 tomorrow can pop in and hear me give a lecture on Wrotham Park damages and other aspects of restrictive covenants and garden leave law. PLUG: third edition of big dull book out next spring.
BV - whilst employees are free to enter or not enter a contract, do you think we have the right balance in place at the moment?I work a lot with California based US firms where non-competes peaked and are now (mostly) struck out aside from some statute restrictions.
Breadvan72 said:
Vaud said:
Breadvan72 said:
Anyone near University College, Dublin at 0830 tomorrow can pop in and hear me give a lecture on Wrotham Park damages and other aspects of restrictive covenants and garden leave law. PLUG: third edition of big dull book out next spring.
BV - whilst employees are free to enter or not enter a contract, do you think we have the right balance in place at the moment?I work a lot with California based US firms where non-competes peaked and are now (mostly) struck out aside from some statute restrictions.
Good luck at UCD tmrw and look forward to more details on the third edition which sounds a good reference point on what is a minefield...
Well got a little further with this today,managing to obtain copies of my resignation correspondence and an email I had sent earlier in the year to the directors pointing out that my job situation wasn't permitting me to function in accordance with the job description I had signed up for - it may or may not be relevant but I'm still glad I got compliance and got a copy.
The copies came from the solicitors rather than the company, which I thought was odd. I hope it cost them to use their services, since I had sent a text message (emails barred) to HR telling them they were legally obliged to send me a copy - I was only posturing as I had no idea if they were obliged to or not! (probably not I'm guessing?)
Had a reassuring phone call this evening from my potentially-next employer, who's solicitors are sending in a letter tomorrow in response to the letter I've / they've received. They want to settle this out of court and have even suggested meeting with the MD who instigated all this - since there was a previous relationship anyway and the two had historically been cross-trading!! That will surely cease if things escalate much further.
Will continue to update as I personally hate reading these sorts of threads retrospectively when they never conclude!
The copies came from the solicitors rather than the company, which I thought was odd. I hope it cost them to use their services, since I had sent a text message (emails barred) to HR telling them they were legally obliged to send me a copy - I was only posturing as I had no idea if they were obliged to or not! (probably not I'm guessing?)
Had a reassuring phone call this evening from my potentially-next employer, who's solicitors are sending in a letter tomorrow in response to the letter I've / they've received. They want to settle this out of court and have even suggested meeting with the MD who instigated all this - since there was a previous relationship anyway and the two had historically been cross-trading!! That will surely cease if things escalate much further.
Will continue to update as I personally hate reading these sorts of threads retrospectively when they never conclude!
There is a problem with employees helping themselves to data, as some people are just plain dishonest, and others are naive (and often misled by bloke in pub advice), but when it comes to protection of trde connections, the law goes too far, I think. In addition, the court will usually grant an interim injunction without much examination of the facts, as that is reserved for trial (most cases never reach trial), and this procedural approach favours the employer.
OP, arguments about the employer not performing its side of the bargain rarely go very far at the initial stage, as all that such arguments usually do is raise an issue for trial. In the meantime, the employer often (not invariably) obtains an interim injunction.
OP, arguments about the employer not performing its side of the bargain rarely go very far at the initial stage, as all that such arguments usually do is raise an issue for trial. In the meantime, the employer often (not invariably) obtains an interim injunction.
I'm surprised people agree to the non-compete. I wouldn't, or at least I would attempt to negotiate it to a point that was acceptable to both sides.
Of course, a lot of non competes come in from dishonest employees taking data they shouldn't, and poaching customers back and forth. A more reasonable non-compete would be (IMHO) that in a year following leaving the company you would undertake to not approach any former customer of the old company. After a year goes past, your knowledge of the financials is a bit murkier due to time, and you'd be able to approach them. It doesn't stop the former customer from approaching the new company either.
Of course, a lot of non competes come in from dishonest employees taking data they shouldn't, and poaching customers back and forth. A more reasonable non-compete would be (IMHO) that in a year following leaving the company you would undertake to not approach any former customer of the old company. After a year goes past, your knowledge of the financials is a bit murkier due to time, and you'd be able to approach them. It doesn't stop the former customer from approaching the new company either.
That is what is called a non solicitation clause. It is a common type of clause, best when paired with a non dealing clause. If those clauses confer sufficient protection, no need for a non compete. Because, however, such clauses are hard to police, and because even an honest employee may not be able to compartmentalise the info that he may use and that which remains confidential to the former employer, a limited non compete may be justified. Lord Denning's idea, not mine.
By the way, one of the Dons at UCD has just handed me her paper arguing that employees might in some circumstances be undertakings for the purposes of competition law. I will read it on the flight home. If you have access to JStor, it may be available online. I will post a link if I find one.
By the way, one of the Dons at UCD has just handed me her paper arguing that employees might in some circumstances be undertakings for the purposes of competition law. I will read it on the flight home. If you have access to JStor, it may be available online. I will post a link if I find one.
Breadvan72 said:
That is what is called a non solicitation clause. It is a common type of clause, best when paired with a non dealing clause. If those clauses confer sufficient protection, no need for a non compete. Because, however, such clauses are hard to police, and because even an honest employee may not be able to compartmentalise the info that he may use and that which remains confidential to the former employer, a limited non compete may be justified. Lord Denning's idea, not mine.
By the way, one of the Dons at UCD has just handed me her paper arguing that employees might in some circumstances be undertakings for the purposes of competition law. I will read it on the flight home. If you have access to JStor, it may be available online. I will post a link if I find one.
Sounds like nonsense to me, but I would appreciate the link if you can find it! I cant remember why, but I once spent a week or so reading all of the literature on the line between Article 101 and the restraint of trade rules. I remember thinking that the attempt to draw close parallels (let alone to blur the line) was misconceived and did not work, even at an academic level.By the way, one of the Dons at UCD has just handed me her paper arguing that employees might in some circumstances be undertakings for the purposes of competition law. I will read it on the flight home. If you have access to JStor, it may be available online. I will post a link if I find one.
The argument focuses on certain groups of professional workers. I did not find the article itself very persuasive, but the author and I discussed how in some markets there could be an anti-competitive concerted practice whereby all or most employees in a particular class are subject to restrictions. For example, retail pharmacy, where because of regulatory requirements no pharmacy shop can be opened and run without a pharmacist, where pharmacists are scarce, and where most are subject to contractual restrictions.
Here is a link to an abstract. OUP subscription needed for full version, or the paper may appear on JStor.
http://jeclap.oxfordjournals.org/content/early/201...
Here is a link to an abstract. OUP subscription needed for full version, or the paper may appear on JStor.
http://jeclap.oxfordjournals.org/content/early/201...
Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff