Former employer will not pay me and are trying to sue!
Discussion
Good day! -I would be very grateful for some advice please!
Summarizing the situation - Until 3 months ago, I worked as the sole UK employee of a middle Eastern based company specializing in the Parts after-market.
When I joined the company, I was literally forced (as part of the induction process) to sign an anti-competition clause that basically prohibited me from ever working within the industry again. I did not want to sign it, but was told that they would not employ me unless I did, and so made me sign it under duress. (They would not give me time to take it home or let a solicitor study it as I was in the Middle East at their head office) I know from previous hearsay that these type of anti-competitor clauses are very dubious and would not stand up in a court of law.
Over the last 3.1/2 years I have worked my butt off building the UK & various export markets up on the sales side, but also doing all the accounts and chasing the money. Etc. Basically, they wanted blood, and it became extremely difficult to maintain a happy family life, not being able to take time off at all for fear of losing business as effectively I had no cover.
Back in May, I was offered a far better job with a manufacturer and therefore, I resigned and started the new job in September.
My original contract with the former employer was for 3 years (as clearly stated in the contract) and technically I left 6 months after the original contract had lapsed (They never realized, and I never told them)
I did not tell my former employer where I was going as I regard it as being none of their business, especially as I know how paranoid they are! Furthermore, it is not direct competition as my former employer specializes in engine parts whereas the new employer manufactures complete vehicles.
The fact is that they owe me over £2K in unpaid Expenses and pension contributions and they have refused to pay me as this is the only leverage they have over me.
I have been chasing them for the money ever since I left and they have been ignoring me, refusing to take my calls and answer any e-mails. However, I have now received an e-mail from my former boss stating the following:
They have found out where I am working and feel that it is a threat to them and looking to take legal action.
They want me to tell them my new job title, Territories where I will be working, and even a copy of new employment contract!
I have replied to them saying that until they pay me what I am owed, I’m not even prepared to talk to them and if they don’t pay me, I will go to the Small Claims Court (I was paid by and officially employed by their UK office, so they do have a token / dormant UK office of sorts)
My question is – Can they do anything even though my contract lapsed 6 months prior to my departure, and what is the best course of action to ensure that they pay me?!
Apologies for the lengthy introduction, but I needed to ensure that I had covered all the points!
PH Collective, over to you...!
Summarizing the situation - Until 3 months ago, I worked as the sole UK employee of a middle Eastern based company specializing in the Parts after-market.
When I joined the company, I was literally forced (as part of the induction process) to sign an anti-competition clause that basically prohibited me from ever working within the industry again. I did not want to sign it, but was told that they would not employ me unless I did, and so made me sign it under duress. (They would not give me time to take it home or let a solicitor study it as I was in the Middle East at their head office) I know from previous hearsay that these type of anti-competitor clauses are very dubious and would not stand up in a court of law.
Over the last 3.1/2 years I have worked my butt off building the UK & various export markets up on the sales side, but also doing all the accounts and chasing the money. Etc. Basically, they wanted blood, and it became extremely difficult to maintain a happy family life, not being able to take time off at all for fear of losing business as effectively I had no cover.
Back in May, I was offered a far better job with a manufacturer and therefore, I resigned and started the new job in September.
My original contract with the former employer was for 3 years (as clearly stated in the contract) and technically I left 6 months after the original contract had lapsed (They never realized, and I never told them)
I did not tell my former employer where I was going as I regard it as being none of their business, especially as I know how paranoid they are! Furthermore, it is not direct competition as my former employer specializes in engine parts whereas the new employer manufactures complete vehicles.
The fact is that they owe me over £2K in unpaid Expenses and pension contributions and they have refused to pay me as this is the only leverage they have over me.
I have been chasing them for the money ever since I left and they have been ignoring me, refusing to take my calls and answer any e-mails. However, I have now received an e-mail from my former boss stating the following:
They have found out where I am working and feel that it is a threat to them and looking to take legal action.
They want me to tell them my new job title, Territories where I will be working, and even a copy of new employment contract!
I have replied to them saying that until they pay me what I am owed, I’m not even prepared to talk to them and if they don’t pay me, I will go to the Small Claims Court (I was paid by and officially employed by their UK office, so they do have a token / dormant UK office of sorts)
My question is – Can they do anything even though my contract lapsed 6 months prior to my departure, and what is the best course of action to ensure that they pay me?!
Apologies for the lengthy introduction, but I needed to ensure that I had covered all the points!
PH Collective, over to you...!
The first and most important bit of advice I would give you is do not listen to legal advice given on the internet where unqualified people without sufficient background information will give you their opinion.
Now for my advice over the internet based on the little bit of information you have shared!
Pull all the documentation you have into a chronology, your contract the anti-competition document you signed emails from your employer about benefits, payments expenses etc. (basically anything about you as an employee rather than your day to day activities etc.), your new employment details including any pre-employment discussions you had by email etc. showing when you started talking to them and the overlap or otherwise with your previous employment etc.. Take this to a decent lawyer who specialises in this area and get a qualified view, do not threaten legal action etc. until you have done so. Get the lawyer to draft or send a letter setting out your position putting the ball in their court. It sounds expensive and it probably will be, but if you leave it to them to start legal proceedings you will have to pay someone to respond so it is better to get on the front foot - probably leaving them with you the view you are serious and that it is not worth fighting.
Now for my advice over the internet based on the little bit of information you have shared!
Pull all the documentation you have into a chronology, your contract the anti-competition document you signed emails from your employer about benefits, payments expenses etc. (basically anything about you as an employee rather than your day to day activities etc.), your new employment details including any pre-employment discussions you had by email etc. showing when you started talking to them and the overlap or otherwise with your previous employment etc.. Take this to a decent lawyer who specialises in this area and get a qualified view, do not threaten legal action etc. until you have done so. Get the lawyer to draft or send a letter setting out your position putting the ball in their court. It sounds expensive and it probably will be, but if you leave it to them to start legal proceedings you will have to pay someone to respond so it is better to get on the front foot - probably leaving them with you the view you are serious and that it is not worth fighting.
What does the clause say? There is much urban mythery and bloke in pubbery about such clauses, which should be ignored. These days, a well drafted clause is more often enforceable than not, and it can be very costly to disregard one. All depends on precise wording, scope and duration of restriction, and business context.
Is your contract governed by English law? I ask this because you say you agreed the contract overseas. This might make a difference.
The fact that the employment continued after the three year initial period would not preclude reliance on the contract if you continued to work on its terms. Take this the right way, but you sound a bit inexperienced in these matters. You should seek legal advice (and not here).
Is your contract governed by English law? I ask this because you say you agreed the contract overseas. This might make a difference.
The fact that the employment continued after the three year initial period would not preclude reliance on the contract if you continued to work on its terms. Take this the right way, but you sound a bit inexperienced in these matters. You should seek legal advice (and not here).
Edited by anonymous-user on Wednesday 5th December 23:49
Thanks for the advice guys - Although the contract was signed in the middle East, the company I was employed by & paid by was their UK sister company.
To be honest, it looks like I'm going to have to consult my new employer's lawyers as I forewarned them that there might be trouble before I committed myself to the new job.
To be honest, it looks like I'm going to have to consult my new employer's lawyers as I forewarned them that there might be trouble before I committed myself to the new job.
If your new employer will make its lawyers available, that's a bonus.
A clause which restrains competition will only be enforceable if its is a limited and reasonable protection for a legitimate interest such as trade connection or business secrets. In sales employees' contracts, recent cases have upheld carefully drafted restrictions with durations of between 3 and 6 months. Longer periods are harder to justify, but may be justified in appropriate cases, as for example in one recentish case about very senior and well paid downstream oil execs.
As well as the time limit on the clause, you have to look at what business it applies to. In relatively rare circumstances, an industry wide restriction might be appropriate, but more commonly the restriction applies to particular activities.
The standard bloke in pub opinion is that these clauses are never enforceable, but in reality courts enforce them on an almost daily basis, if they are properly drafted. The cost of getting it wrong can easily run into six figures for the hapless employee, so expert legal advice is essential.
I hope you don't become embroiled in litigation, but let me know if you do, as I might need some new cases for the third edition of my chambers' book on this subject which we are writing for publication next year.
A clause which restrains competition will only be enforceable if its is a limited and reasonable protection for a legitimate interest such as trade connection or business secrets. In sales employees' contracts, recent cases have upheld carefully drafted restrictions with durations of between 3 and 6 months. Longer periods are harder to justify, but may be justified in appropriate cases, as for example in one recentish case about very senior and well paid downstream oil execs.
As well as the time limit on the clause, you have to look at what business it applies to. In relatively rare circumstances, an industry wide restriction might be appropriate, but more commonly the restriction applies to particular activities.
The standard bloke in pub opinion is that these clauses are never enforceable, but in reality courts enforce them on an almost daily basis, if they are properly drafted. The cost of getting it wrong can easily run into six figures for the hapless employee, so expert legal advice is essential.
I hope you don't become embroiled in litigation, but let me know if you do, as I might need some new cases for the third edition of my chambers' book on this subject which we are writing for publication next year.
Edited by anonymous-user on Thursday 6th December 15:07
I really appreciate your advice Breadvan72 as you obviously know your onions! Interesting development this morning as I have now received a note saying that they are happy that there will be no conflict and they are willing to pay the outstanding monies owed, but they effectively want me to sign a End of employment & Non Disclosure/ No Competition form. It makes me wonder whether they lost the original! Hey-ho, things are looking up!
Breadvan72 said:
What does the clause say? There is much urban mythery and bloke in pubbery about such clauses, which should be ignored. These days, a well drafted clause is more often enforceable than not, and it can be very costly to disregard one. All depends on precise wording, scope and duration of restriction, and business context.
My next door neighbour switched from working for a German company to a UK one and the German company threatened to take legal action.There followed much consulting of lawyers and getting Councels opinion and he said nobody would give a straight answer on anything. Figures of £40K were were being bandied around for the initial legal fees and his new employer was starting to get wobbly.
In the end it was agreed he would go on 12mths gardening leave and his old company paid him half pay for the time.
This was a high level job though (technical director designate) which apparently make a difference.
Just to add my experience. The advice that I have received as an employer with regard to restrictive covenants in employment contracts is that you have to demonstrate material loss. Clearly jumping ship and going to a competitor with business that your previously employer had invested in winning is probably enforceable as material loss can be demonstrated.
Your circumstances seem very different and what your ex-employer appears to be trying to do is effectively restraint of trade. My understanding is that no court would enforce this.
Clearly breadvan is in the legal business so his opinions carry far more weight than my own. I do have to take issue with legal advice being clear. In all my years of dealing with legal professionals their advice has never been black and white. If it was they'd always get a satisfactory result for their clients - something which they only seem to achieve infrequently. I personally take their advice and use it like any other piece of management information and use my experience and understanding of the context to make a decision.
Based on what you've said. They've broken a contract - to pay you for services. I'd aggressively (in business terms) recover the money. I'd also point out that you're not in any competition with them in your new role and other than that they can F.O.
Your circumstances seem very different and what your ex-employer appears to be trying to do is effectively restraint of trade. My understanding is that no court would enforce this.
Clearly breadvan is in the legal business so his opinions carry far more weight than my own. I do have to take issue with legal advice being clear. In all my years of dealing with legal professionals their advice has never been black and white. If it was they'd always get a satisfactory result for their clients - something which they only seem to achieve infrequently. I personally take their advice and use it like any other piece of management information and use my experience and understanding of the context to make a decision.
Based on what you've said. They've broken a contract - to pay you for services. I'd aggressively (in business terms) recover the money. I'd also point out that you're not in any competition with them in your new role and other than that they can F.O.
Breadvan72 said:
What does the clause say? There is much urban mythery and bloke in pubbery about such clauses, which should be ignored. These days, a well drafted clause is more often enforceable than not, and it can be very costly to disregard one. All depends on precise wording, scope and duration of restriction, and business context.
Would the fact that it appears to be a lifetime ban on working in that industry again not be enough to make it invalid?I have now had a shufty. This particular clause is bats
t crazy, and would never in a gazillion years be enforceable.
As for opacity of advice, duff lawyers tend to be vague. Better lawyers tend to say clearly what they think. Predicting outcomes in litigation is by its nature an imprecise art, but the lawyer should at least give a clear opinion.
t crazy, and would never in a gazillion years be enforceable. As for opacity of advice, duff lawyers tend to be vague. Better lawyers tend to say clearly what they think. Predicting outcomes in litigation is by its nature an imprecise art, but the lawyer should at least give a clear opinion.
Edited by anonymous-user on Friday 7th December 19:38
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