Recruitment Restrictive Covenant

[Maverick007]

Hi All

Need some advice please. Any employment law specialists out there?!


I'm going to work for another company in the recruitment sector. I have a 12 month restrictive covenant in my current contract which means that I can't approach any current clients. What would happen though if the new company I go to work for contacts them and joins the PSL for a certain client and starts working with them?

And if the current company find out that the new company are recruiting for this client, can they do anything and can they come for me personally?

If they can't do anything, I assume I would have to not be the contact point anymore until the 12 months runs out?


Thanks

[foliedouce]

Unless you a very senior employee / director / shareholder then 12 months is probably unenforceable, 6 months seems more reasonable / likely to hold up in court for more junior employees

If one of your colleagues in the new company happens to contact someone then there's very little they can do about it legally unless they can prove you were complicit / stole data.

However, for me this is about integrity. Doesn't seem right you're planning to stitch up your previous employer. They have paid you to generate / manage those relationships / clients so in my view they belong to them, at least for a period of time.

In my view, don't touch any of your previous clients for at least 6 month even by proxy, then fill your boots.

I'm surprised your new employer is encouraging it, I wonder how they would feel if one of their ex employees did similar.

Edited by foliedouce on Tuesday 30th April 20:56

[Vaud]

foliedouce said:

Unless you a very senior employee / director / shareholder then 12 months is probably enforceable, 6 months seems more reasonable / likely to hold up in court.

That is a brave statement, from all that I have read by the likes of Breadvan.

OP, before you join the company, take their indemnified legal advice if you have a concern.

[foliedouce]

Vaud said:

That is a brave statement, from all that I have read by the likes of Breadvan.

OP, before you join the company, take their indemnified legal advice if you have a concern.

I agree that the OP should take legal advice and then make the decision based on commercial risk (morals aside), PH is full of infinite wisdom, but it's not always right!

I mention the 12 months, although it was a few years ago, the advice I had from our lawyer was 12 months for shareholder agreements and senior employee contracts, all other employment contracts should be 6 months as they felt 12 could be unenforceable.

Edited by foliedouce on Tuesday 30th April 16:11

[Vaud]

foliedouce said:

PH is full of infinite wisdom, but it's not always right!

Breadvan72 is a barrister who literally wrote the guiding book on the topic.

[foliedouce]

Hopefully he'll be along soon then for a more informed view

[khushy]

integrity and honourability have no pricetag or restrictions

[dogz]

I’ve worked in senior roles for 2 of the big 4 professional services firms. When I’ve left I’ve been bound by 6 month restrictive covenants

My view is unless you want to give yourself sleepless nights, abide by what’s asked. I’m sure in some situations they are unenforceable but do you want to give yourself the stress if you end up in a legal tussle. I didn’t!

[foliedouce]

dogz said:

I’ve worked in senior roles for 2 of the big 4 professional services firms. When I’ve left I’ve been bound by 6 month restrictive covenants

My view is unless you want to give yourself sleepless nights, abide by what’s asked. I’m sure in some situations they are unenforceable but do you want to give yourself the stress if you end up in a legal tussle. I didn’t!

Interesting that the Big 4 only restrict for 6 months given the passionate responses above that 12 months is enforceable. Outside of any technology IP they may own, people are their biggest asset so you'd imagine they would restrict for as long as possible.

Google throws up the following on the first page:-

https://www.landaulaw.co.uk/restrictive-covenants/

Non-solicitation of clients

The non-poaching restrictive covenants aim to stop you having contact with clients/customers/contacts of your employer, usually for a set period of time after you have left (usually for 3,6 or 12 months for more senior staff). The restrictions can either be in the form of a “non-solicitation”, or “non-dealing” clause – the latter being more onerous as it is a more blanket restriction of dealing with the contacts, rather than limiting it to your actual “soliciting” those contacts for business

https://www.haroldbenjamin.com/site/what_we_do/hrb...

As a rule of thumb, 3-6 months would probably be enforceable; 6-12 months may be enforceable; 12-24 months are only likely to be enforceable against very senior employees and restrictions lasting longer than 24 months are unlikely to be enforceable.

So in the absence of Breadvan giving his expert opinion, I'll stick to what I said originally:-

"Unless you a very senior employee / director / shareholder then 12 months is probably unenforceable, 6 months seems more reasonable / likely to hold up in court for more junior employees"

For those saying it's bks, it would be good to hear why that is rather than just stating it as fact. My info (but as I said, it is a few years old) was from our corporate employment law firm as I've already stated.

[Canute]

And assuming matey above is right ^^^ then, you should be financially compensated properly during this period also!

[Maverick007]

Thanks all for the advice

Does anyone know if it's a different situation if people are made redundant , are they still bound by a covenant?

I did speak to an employment lawyer and they said the company have to prove a financial loss and its v expensive to sue people.

He also said to not do anything for 6-9 months and then I should be ok as it wouldn't be worth them using for the sake of a few months.

[Maverick007]

Er..no it wasn't actually why?

Looking again at the covenant which is worded poorly it mentions not dealing with companies for 12 months but within a 15 mile radius but doesn't say whether I need to be at least 15 miles away or the clients 15 miles away.

[Broccers]

Why are you leaving? If your job is impossible constructive dismissal tribunals get things like this out of the way

[darreni]

The current data protection laws may be a bigger issue with regard to contacting your ex employers clients.

[Cyberprog]

anonymous said:

[redacted]

It's personally identifiable information? Name, phone number, company who they currently work for?

[anonymous-user]

A friend of mine made this mistake. Moved from one company to another and started moving all his old customers to the new firm basically straight away. It wasn’t him making the calls. The old company took it very seriously, there was a court case, he nearly lost his new job (kept it because the director told him to do this), and they spent a lot in legal fees to minimise all the issues he had created.

Another friend is just going through a similar thing. He didn’t leave for another company, he left to set up his own. There wasn’t even a non compete clause in his contract but the company he worked for is still suing him. Even though there (apparently) isn’t a case because there was nothing stopping him contractually, it’s still costing him a fortune in lawyers. This is money he had saved to use as cash flow during his start up phase. He will likely run out of money before he gets going properly because of the distraction and financial drain that is a legal dispute. I did warn him but he didn’t listen.

If it’s in the contract and they find out, they’ll likely fight you for it if you break the rules even if it’s just to set a precedent. Even if it’s not and you start treading on their toes and the boss is enough of a bulldog, you might end up in a hot mess. I wouldn’t bother.