Restrictive Covenents
Discussion
Just looked in my contract and it says that I shall not work anywhere in the 6 months after serving notice that is classed as competition - are these enforceable?
However, in my line of work, just about anyone could be classed as a competitor in a really broad field of what I do - numerous folk have left and worked at places that would fit the bill, however, I would say the potential move I am looking to make would be akin to leaving Man UTD to go to Liverpool.
Be interested to know thoughts of anyone in the know.
However, in my line of work, just about anyone could be classed as a competitor in a really broad field of what I do - numerous folk have left and worked at places that would fit the bill, however, I would say the potential move I am looking to make would be akin to leaving Man UTD to go to Liverpool.
Be interested to know thoughts of anyone in the know.
You'll probably receive answers on both sides, with experiences from people who've enforced them and those who've gone on to another job in the same industry either having negotiated out of a non compete or ignored it and everyone lived happily ever after
If you're bothered about it, I guess you could take advice. Where and who from is up to you, it might be a starting point with your manager or boss. I negotiated out of mine when I was being made redundant using a line of it wasnt fair on me for them to say they didnt want me, and then make sure no-one else could have me
If you're bothered about it, I guess you could take advice. Where and who from is up to you, it might be a starting point with your manager or boss. I negotiated out of mine when I was being made redundant using a line of it wasnt fair on me for them to say they didnt want me, and then make sure no-one else could have me
They are definitely enforceable, however there is always a chance yours is defective plus there can be a commercial settlement.
There is no substitute for spending some time with an expert so I would advise spending an hours or so with a quality employment lawyer. It shouldn't cost too much.
There is no substitute for spending some time with an expert so I would advise spending an hours or so with a quality employment lawyer. It shouldn't cost too much.
desolate said:
May be worth speaking to you new employer as they may may prepared to assist with legals.
Hasn't happened yet, but just seeing what the score might potentially be. But as I said, countless others have gone without recourse, but arguably none have gone to someone quite as close a competitor, BUT I don't see that the wording makes any difference whether they're close comp or just a comp, same thing...okgo said:
Hasn't happened yet, but just seeing what the score might potentially be. But as I said, countless others have gone without recourse, but arguably none have gone to someone quite as close a competitor, BUT I don't see that the wording makes any difference whether they're close comp or just a comp, same thing...
Breadvan posted some very interesting precedents in which people were stopped from working for certain periods of time. May be worth searching for the posts (could be in the speed, plod and the law forum)
This clause contains five restrictions:-
(a) a non solicitation clause,
(b) a non poaching of colleagues clause,
(c) a non competition clause,
(d) a non dealing clause,
(e) a non representation clause.
(a) is enforceable as to customers but the definition of prospective customer is arguably too wide as it includes a prospect with whom you had no contact. The words "Prospective Customer" can be severed from the clause.
(b) is enforceable, and usually these clauses are of little relevance anyway.
(c) could be said to be too wide because of the words "in any Capacity", but this argument failed in TFS Derivatives v Morgan, a case regarded as authoritative. See paragraphs 30 and 63.
http://www.bailii.org/ew/cases/EWHC/QB/2004/3181.h...
(d) as (a)
(e) is enforceable.
Note that the covenant will not survive if the employer repudiates the contract. The provision to contrary effect is invalid.
OP, if you do plan to move to a competitor, you should take insured legal advice now. You may be able to negotiate an exit deal, but if you can't the current employer might and could enforce the clause, at the very least on an interim basis. The cost of contesting a covenant to trial is likely to be close to or to exceed £100,000. Take advice.
IAAL but IANYL. At least it won't be me on the other side if you end up in Court (as by giving this free advice I have conflicted myself out of acting for your employer).
You may receive other advice here. You must decide what advice to follow. To give my advice some context, I have been practising in this specific area of law for 29 years, am listed in the peer-review legal directories as an expert in the field, and have written a chapter in an OUP book on the subject. I might, of course, still be wrong.
(a) a non solicitation clause,
(b) a non poaching of colleagues clause,
(c) a non competition clause,
(d) a non dealing clause,
(e) a non representation clause.
(a) is enforceable as to customers but the definition of prospective customer is arguably too wide as it includes a prospect with whom you had no contact. The words "Prospective Customer" can be severed from the clause.
(b) is enforceable, and usually these clauses are of little relevance anyway.
(c) could be said to be too wide because of the words "in any Capacity", but this argument failed in TFS Derivatives v Morgan, a case regarded as authoritative. See paragraphs 30 and 63.
http://www.bailii.org/ew/cases/EWHC/QB/2004/3181.h...
(d) as (a)
(e) is enforceable.
Note that the covenant will not survive if the employer repudiates the contract. The provision to contrary effect is invalid.
OP, if you do plan to move to a competitor, you should take insured legal advice now. You may be able to negotiate an exit deal, but if you can't the current employer might and could enforce the clause, at the very least on an interim basis. The cost of contesting a covenant to trial is likely to be close to or to exceed £100,000. Take advice.
IAAL but IANYL. At least it won't be me on the other side if you end up in Court (as by giving this free advice I have conflicted myself out of acting for your employer).
You may receive other advice here. You must decide what advice to follow. To give my advice some context, I have been practising in this specific area of law for 29 years, am listed in the peer-review legal directories as an expert in the field, and have written a chapter in an OUP book on the subject. I might, of course, still be wrong.
Breadvan72 said:
PS: For future reference, the best time to read a proposed contract is BEFORE you agree to it, rather than when you are thinking of doing something that may break an extant agreement.
But then our breed would be struggling to put food on the table 
And to the OP: to give you some context, I was in a similar position a year ago, when I came out of a job with a 1 year RC clause. My ex employer was very keen to ensure that I upheld such a clause and furthermore, they continued to express an interest in my circumstances once I'd left that role for a good six months (even for an urchin like me).
As others have said, if you are concerned enough to have posed the question on here, then a few hundred quid for a decent employment lawyer (i.e. not just some blokes off the internet - BV notwithstanding) should be considered a wise investment.
I’ve seen these come up on here before, if you have one of these in your contract are you expected to stay with a company until they sack you or take an x amount of paid time off before starting a new job? If you are expected to negotiate your way out each time, why bother with them?
If a company is worried about poaching customers / taking sensitive information to their new job can’t that be covered using other laws opposed to tying down the staff?
I’m just interested really; will never happen to me as I’m not that important!
If a company is worried about poaching customers / taking sensitive information to their new job can’t that be covered using other laws opposed to tying down the staff?
I’m just interested really; will never happen to me as I’m not that important!
Some employment contracts have a separate clause enabling the employee to be placed on paid garden leave when under notice to end the employment. The period of garden leave is usually but not always deducted from the duration of any post termination restraint.
Misuse of confidential information is unlawful even without a contractual restriction, but breaches of confidence are hard to police. Hence non competition clauses. There can be no restriction on soliciting customers absent an effective restrictive covenant or a springboard injunction based on pre-termination disloyalty. Thus covenants are the preferred method of protecting trade connections and confidential information.
Misuse of confidential information is unlawful even without a contractual restriction, but breaches of confidence are hard to police. Hence non competition clauses. There can be no restriction on soliciting customers absent an effective restrictive covenant or a springboard injunction based on pre-termination disloyalty. Thus covenants are the preferred method of protecting trade connections and confidential information.
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