Restrictive Covenant
Discussion
Wondering if anyone here can tell me where to get the best advice.
I have been working for a client for over ten years now, I work as a Designer and worked along side this client at my previous employers.
I recently joined a new company and they continued to use me at the new place, I have only been there 6 months but it isn't right for me and I'm still on probation.
I don't like the atmosphere and I don't feel like I'll be able to progress there.
Aforementioned client has asked if I will contract for them directly, however my contract states:
"For a period of six (6) months following the date on which your employment terminates
you shall not without the prior written consent of the Company, alone or with others,
whether directly or indirectly, and whether for the benefit of you or any person other than
the Company:
22.4.1 canvass or solicit or entice away business, orders or custom relating to services
or products similar to and competitive with those provided by the Company
and in which you were actively involved from any person who at the date
of termination of your employment and/or at any time during the Relevant
Period was a client or customer of the Company and with whom or with whose
business you were actively engaged or concerned;
22.4.2 deal or transact business in relation to services or products similar to and
competitive with those provided by the Company and in which you were actively
and/or at any time during the Relevant Period was a client or customer of the
concerned; and
22.4.3 solicit, induce, encourage, attempt to solicit, induce or encourage (whether directly
or indirectly) any senior executive or manager with whom you had material
contact during the Relevant Period who is employed by or who renders services
to the Company to terminate his or her employment with or otherwise cease
or indirectly, employ, engage or offer employment to or an engagement to any
such person. involved with any person who, at the date of termination of your employment
Company with whom or with whose business you were actively engaged or
his or her relationship with the Company and similarly will not, whether directly"
I have googled this and get a range of answers from "seek legal advice" to "ignore it".
Has anyone had any prior experience on this type of restriction in their contract?
I have been working for a client for over ten years now, I work as a Designer and worked along side this client at my previous employers.
I recently joined a new company and they continued to use me at the new place, I have only been there 6 months but it isn't right for me and I'm still on probation.
I don't like the atmosphere and I don't feel like I'll be able to progress there.
Aforementioned client has asked if I will contract for them directly, however my contract states:
"For a period of six (6) months following the date on which your employment terminates
you shall not without the prior written consent of the Company, alone or with others,
whether directly or indirectly, and whether for the benefit of you or any person other than
the Company:
22.4.1 canvass or solicit or entice away business, orders or custom relating to services
or products similar to and competitive with those provided by the Company
and in which you were actively involved from any person who at the date
of termination of your employment and/or at any time during the Relevant
Period was a client or customer of the Company and with whom or with whose
business you were actively engaged or concerned;
22.4.2 deal or transact business in relation to services or products similar to and
competitive with those provided by the Company and in which you were actively
and/or at any time during the Relevant Period was a client or customer of the
concerned; and
22.4.3 solicit, induce, encourage, attempt to solicit, induce or encourage (whether directly
or indirectly) any senior executive or manager with whom you had material
contact during the Relevant Period who is employed by or who renders services
to the Company to terminate his or her employment with or otherwise cease
or indirectly, employ, engage or offer employment to or an engagement to any
such person. involved with any person who, at the date of termination of your employment
Company with whom or with whose business you were actively engaged or
his or her relationship with the Company and similarly will not, whether directly"
I have googled this and get a range of answers from "seek legal advice" to "ignore it".
Has anyone had any prior experience on this type of restriction in their contract?
k all rights as an employee until you've been employed continuously for two years.The clause is likely to be enforceable, subject always to the precise facts of your case, OP. It matters not that you had a prior relationship with the client, as the employer has a legitimate interest in protecting its connection with that client. It also matters not that you have only been employed for a few months. The clause was either enforceable from day one or it was not. Enforcement of such a clause by injunction is discretionary, and a Judge might exercise discretion and decline to enjoin a departing employee who had only been with the employer for, say, a few days, but in your case I would say that, if there were a dispute on the clause, the employer would be likely to win it.
Sorry, but them's da breaks.
Sorry, but them's da breaks.
Edited by anonymous-user on Sunday 13th April 08:46
If you are planning to seek a job that might raise an issue of breaching the covenant, then yes you do. Suggestions include David Ludlow at Barlow Robbins in Woking, Helen Briant at DWF, Richard Thorpe at Shakespeares, Marty Byrne at Oxford Employment Law, or - if money is not much of an object - Dan Aherne at Olswang or Meriel Schindler at Withers. If you are in Scotland, you will need a Scots lawyer.
Terminator X said:
I see. Why does anyone sign up to such a thing as they're effectively unemployable for 6 months after they leave?!
TX.
It only stops him dealing with clients of the company he is leaving, so doesn't affect his ability to deal with entities who are not clients of the current employer.TX.
ETA just read again in light of your previous post. I think BV meant he can't work with the client in question at a new employer, not that he can't with a new employer at all.
If I am wrong I am sure he will correct me and he will be right!
Edited by anonymous-user on Tuesday 15th April 22:53
You are not wrong.
The clause restricts solicitation of and dealing with a defined class of customers, and note that it would apply if the employee works for a new employer or if he or she sets up his or her own business.
Employees often trot out the argument that the covenant will stop them working anywhere, but no clause that actually did that would be upheld. The clause in question here does not do that.
The clause restricts solicitation of and dealing with a defined class of customers, and note that it would apply if the employee works for a new employer or if he or she sets up his or her own business.
Employees often trot out the argument that the covenant will stop them working anywhere, but no clause that actually did that would be upheld. The clause in question here does not do that.
Edited by anonymous-user on Wednesday 16th April 06:42
Terminator X said:
Breadvan72 said:
That is because you aren't reading it correctly. This is a non solicitation clause and also a non dealing clause.
I see. Why does anyone sign up to such a thing as they're effectively unemployable for 6 months after they leave?!TX.
Are your personal services the only thing that the client uses from your current employer? If not, i.e. you design, and other bits of the company build, you may be able to negotiate something with the current employer, as otherwise the client will simply wander off and find somebody new for everything.
As BV says it's easily enforceable, I'd suggest jaw-jaw at first, rather than a solicitor with war-war in mind.
As BV says it's easily enforceable, I'd suggest jaw-jaw at first, rather than a solicitor with war-war in mind.
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