non compete clause
Discussion
In the not to distant future I (and my colleagues) expect to get a new employment contract to 'homologate' us within the company that took over my employer 2-3 yrs ago. In general what is good will get even better. I understand they like to slip the 'old 12 mnth non compete' clause in contracts these days in addition to my 16wks notice. Now I don't intend on leaving as I have 20yrs service & I like my job so from that aspect a NC clause is not an issue. If however, I was to be made redundant or offered voluntary redundancy in the future, can a NC clause still be enforced?
Shep
Shep
Edited by shep1001 on Sunday 12th August 09:27
Firstly, depends on the nature of the NC clause. Factors are the amount of time, the location and the actual nature of the work e.g. 12 months within the UK - highly unlikely to be upheld; 3-6 months in same town - depends upon trade and whether it's a reasonable means of protecting the employer's interests.
But, NC would only apply if you left the company of your own accord. i.e. the clause is there to stop you gaining knowledge then b*gg*ring off to set up your own business in competition.
If the company makes you redundant then any NC clause should be void - it's the employer's intention that has caused the separation, not yours. You might want to check the paperwork when you see it. If it doesn't have such a note then you could try and ask for one to be added.
But, NC would only apply if you left the company of your own accord. i.e. the clause is there to stop you gaining knowledge then b*gg*ring off to set up your own business in competition.
If the company makes you redundant then any NC clause should be void - it's the employer's intention that has caused the separation, not yours. You might want to check the paperwork when you see it. If it doesn't have such a note then you could try and ask for one to be added.
In the United Kingdom, Restraint of Trade clauses may be used only if the employer can prove a legitimate business interest to protect in entering the clause into the contract. Mere competition will not amount to a legitimate business interest.
http://en.wikipedia.org/wiki/Non-compete_clause
A recent case under appeal may also provide useful background, although this case was about time during employment.
http://www.employmentlawwatch.com/2012/07/articles...
http://en.wikipedia.org/wiki/Non-compete_clause
A recent case under appeal may also provide useful background, although this case was about time during employment.
http://www.employmentlawwatch.com/2012/07/articles...
"All accounts" may well be wrong. In a suitable business context, a carefully drafted 12 month non competition clause could be enforceable.
Take expert advice before acting in a manner inconsistent with any post termination restrictive covenant. Bloke in pub and internet wisdom says that they are not enforceable. High Court Judges regularly decide otherwise.
I act in these cases regularly, and have written part of a textbook on the subject, so I hope to offer more than bloke in pub perspectives on this.
Take expert advice before acting in a manner inconsistent with any post termination restrictive covenant. Bloke in pub and internet wisdom says that they are not enforceable. High Court Judges regularly decide otherwise.
I act in these cases regularly, and have written part of a textbook on the subject, so I hope to offer more than bloke in pub perspectives on this.
Edited by anonymous-user on Tuesday 21st August 20:17
PS: OP, redundancy would not alter the enforceability of a restrictive covenant. A wrongful dismissal (that is: one in breach of contract), would invalidate the covenant.
Otherwise, its validity would depend on the business context and the precise wording, applying the principle that only a reasonable restraint which protects a legitimate business interest is enforceable.
Otherwise, its validity would depend on the business context and the precise wording, applying the principle that only a reasonable restraint which protects a legitimate business interest is enforceable.
Breadvan72 said:
PS: OP, redundancy would not alter the enforceability of a restrictive covenant. A wrongful dismissal (that is: one in breach of contract), would invalidate the covenant.
Otherwise, its validity would depend on the business context and the precise wording, applying the principle that only a reasonable restraint which protects a legitimate business interest is enforceable.
Thanks for the info. I will wait to see what pops up in the new contract & take legal advise before signing my new contract. Otherwise, its validity would depend on the business context and the precise wording, applying the principle that only a reasonable restraint which protects a legitimate business interest is enforceable.
Edited by shep1001 on Tuesday 21st August 21:57
You could even be a tad cheeky and ask your employer to contribute to the cost of advice, as part of the sweetener for agreeing the new deal. If the takeover was a TUPE takeover, and not a share purchase, then you can't be compelled to change your contract because of the transfer, even some time after it. Subsidised legal advice could, however, weigh with the court in favour of the employer if there were to be a dispute about the reasonableness of contract later.
Breadvan72 said:
You could even be a tad cheeky and ask your employer to contribute to the cost of advice, as part of the sweetener for agreeing the new deal. If the takeover was a TUPE takeover, and not a share purchase, then you can't be compelled to change your contract because of the transfer, even some time after it. Subsidised legal advice could, however, weigh with the court in favour of the employer if there were to be a dispute about the reasonableness of contract later.
No it was share purchase. I believe where they have had issues in the past extended garden leave has been used instead. 12 months paid leave with all your 'frilly bits' is the norm where they don't want people making a fuss. When a suitable job appears your back on board.Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff