Non-compete clauses
Discussion
In my experience working in recruitment these clauses are increasingly difficult to enforce. The key seems to be what is considered as ‘reasonable’.
When I sold my business I was asked to sign agreed a 6 month non competition clause. Apparently any longer would be seen as unenforceable. I could very easily have started up again after 6 months and won back clients I’d been dealing with many years.
Breadvan will probably take a very cautious approach. Let’s see what’s in the contract.
When I sold my business I was asked to sign agreed a 6 month non competition clause. Apparently any longer would be seen as unenforceable. I could very easily have started up again after 6 months and won back clients I’d been dealing with many years.
Breadvan will probably take a very cautious approach. Let’s see what’s in the contract.
bad company said:
There’s something wrong there. Why would your company be in Court, against whom? There’s presumably no contract preventing you from recruiting people from your competitors.
The big boys as you say won’t like it but they often huff, puff and do nothing.
You have agreed to a contract that says you can not work for X and Y companies for Z and A months. This could potentially be enforced. Against both the employee and company. Your former employer has a legitimate business interest to protect after all.The big boys as you say won’t like it but they often huff, puff and do nothing.
An employer taking on and encouraging a breach of contract by an employee against a former employer might be sued alongside the employee for procuring the breach. They then might be liable to account for profits or damages in respect of the breach.
Restrictive covenants can be and regularly are enforced. Contracts of employment also contain an implicit duty of confidentiality (i.e. no explicit clause required) that survives termination, protecting previous employers' confidential information and trade secrets.
Restrictive covenants can be and regularly are enforced. Contracts of employment also contain an implicit duty of confidentiality (i.e. no explicit clause required) that survives termination, protecting previous employers' confidential information and trade secrets.
RonaldMcDonaldAteMyCat said:
An employer taking on and encouraging a breach of contract by an employee against a former employer might be sued alongside the employee for procuring the breach. They then might be liable to account for profits or damages in respect of the breach.
Restrictive covenants can be and regularly are enforced. Contracts of employment also contain an implicit duty of confidentiality (i.e. no explicit clause required) that survives termination, protecting previous employers' confidential information and trade secrets.
An employer ‘might’ be sued. Yes it’s a (very remote) possibility as possible as a former employee being sued. Restrictive covenants can be and regularly are enforced. Contracts of employment also contain an implicit duty of confidentiality (i.e. no explicit clause required) that survives termination, protecting previous employers' confidential information and trade secrets.
I ran an owned a recruitment agency placing lawyers for 23 years and this just didn’t happen. Threats of legals yes, lots of ‘sabre rattling’ but nobody got sued.
Companies and individuals don't tend to advertise when they receive letters before claim or settle disputes.
Lawyers make plenty of money dealing with post employment breach of contract.
It doesn't happen every day because, without solid evidence, what can you do? When companies do get evidence, they are incentivised to act pour encourager les autres. Others, particularly small businesses, will be pragmatic and take a view that the damage from a breach is less costly than the disruption from legal action.
That is not the same as breaches being inactionable or that companies won't enforce contracts.
Lawyers make plenty of money dealing with post employment breach of contract.
It doesn't happen every day because, without solid evidence, what can you do? When companies do get evidence, they are incentivised to act pour encourager les autres. Others, particularly small businesses, will be pragmatic and take a view that the damage from a breach is less costly than the disruption from legal action.
That is not the same as breaches being inactionable or that companies won't enforce contracts.
Just to add, law firms are odd cookies in these kind of things. Clients will often follow a lawyer or team, so lateral hires can result in a shift of clients from one firm to another. It's one of the reasons post-ABS law firms are still not as enticing to outside investment as some other verticals- the firm's 'IP' is within the staff, who regularly up sticks and sod off, meaning the value can walk out of the door.
Other commercial verticals with products and customers and sales operations with IP distinct from the staff don't necessarily behave the same as law firms or other professions.
Other commercial verticals with products and customers and sales operations with IP distinct from the staff don't necessarily behave the same as law firms or other professions.
The European database right is the magical trump card that too many employers and too many lawyers miss out on. No need to prove that information is confidential, just show that it's in a database, and has been purloined. The database right is analogous to a copyright. If it arises in an employee disloyalty case, it can offer a slam dunk win for an employer. Introduced by an EU Directive as part of the EU's e-commerce and digital markets agendas, the database right is now part of the UK's copyright legislation, and will probably remain in place after the end of this year when the UK goes on its, er, adventure holiday.
As for any individual contract or case, I am no longer offering free legal opinions on PH, whether on restrictive covenants or on any other legal subject, because I have learned that no good deed will go unpunished. I will simply say that it is often unwise to assume that post termination restrictions are not enforceable, or that employers cannot or will not enforce them by seeking and sometimes obtaining injunctions. Listening to pub advice on this subject can be a fast route to a six figure legal bill, and, yes, I did say six figures. All depends on (1) the precise wording of the contract; (2) the specific commercial context in which the contract was made; (3) the full facts of each individual case.
As for any individual contract or case, I am no longer offering free legal opinions on PH, whether on restrictive covenants or on any other legal subject, because I have learned that no good deed will go unpunished. I will simply say that it is often unwise to assume that post termination restrictions are not enforceable, or that employers cannot or will not enforce them by seeking and sometimes obtaining injunctions. Listening to pub advice on this subject can be a fast route to a six figure legal bill, and, yes, I did say six figures. All depends on (1) the precise wording of the contract; (2) the specific commercial context in which the contract was made; (3) the full facts of each individual case.
Edited by anonymous-user on Saturday 11th July 14:09
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