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Left my job but this is in the contract

thedude

Distinguished Member
Hi guys ive left my job and this is in the contract can they actually inforce this? I want to start up by myself. Any thoughts any legal wizards or HR gurus here

"Competition agreement"

It is a condition of your employment, that for a period of twelve months immediately following he termination of your employment for any reason whatsoever, you will not, whether directly or indirectly as principal, agent, employee, director, partner or otherwise howsoever approach any individual who has during your period of employment been a customer of ours, if the purpose for such is to solicit business which could have been undertaken by us. Neither shall you setup a business or work for a business in any capacity, in direct competition with ourselves within a five mile radius of any of our sites, within the same twelve month period.
 

McVicar

Distinguished Member
It was just a heads up mate, nothing more. Let me know if you think its better to delete these posts to keep your thread clear and focused.
 

rousetafarian

Moderator
Are we talking about a restrictive covenant here which will end up in a 'cease and desist' type action. I've been subject to one or two of these historically due to the competitive nature of the market I work in and being head-hunted.

My solicitor stated they are very difficult to enforce due to, and forgive me remembering the term exactly, but along the lines of prevention of the ability to earn a living.

Get an employment lawyer if they push you.
 

balidey

Distinguished Member
A bit anecdotal but I was told (and I can't remember who told me) that a contract is totally enforceable whilst you are employed by someone, but as soon as you leave they have no legal control over anything you do.
If you look at your contract it refers to you as the employee and the company as the employer. If it says the employee must do something, you have to. But as soon as you leave employment, then you are no longer under the terms of the agreement.
Although saying that, any sort of legal interaction afterwards is done by lawyers and anything they do costs a fortune, so they could make it expensive for you.

But best if you get some correct legal advice first.
 

Solomon Grundy

Distinguished Member
I have first hand experience. While they can't stop you working in the same industry they might be able to take action against you if you contact their existing customers.
 

officerdibble11

Active Member
Are we talking about a restrictive covenant here which will end up in a 'cease and desist' type action. I've been subject to one or two of these historically due to the competitive nature of the market I work in and being head-hunted.

My solicitor stated they are very difficult to enforce due to, and forgive me remembering the term exactly, but along the lines of prevention of the ability to earn a living.

Get an employment lawyer if they push you.

Restraint of trade is the term your looking for, tricky to uphold from their end.
 
D

Deleted member 27989

Guest
Tricky to uphold legally. However, don't forget that it is a very small world, and some people have a long memory. I would just stay clear for now.
 

thedude

Distinguished Member
The two main clauses seem to be for twelve months:
- Don't work within five miles
- Don't approach any former customers

Without knowing more these seem quite easy to comply with - particularly as former customers can approach you - ?
I was planning on setting up my own company and offering a similar service as I have done this for 5 years now.
I would be happy not to take old customers by approaching them.
The part of not working within five miles is the harder. That rules out any local company.
 

outoftheknow

Moderator
I was planning on setting up my own company and offering a similar service as I have done this for 5 years now.
I would be happy not to take old customers by approaching them.
The part of not working within five miles is the harder. That rules out any local company.
Personally I think 5 miles radius is too far and they will be more bothered about no poaching of customers. The distance needs to be reasonable based on where the business is located. Somewhere around 1-2 miles and it is unlikely you need to challenge not being able to work. Draw it on a map and see what is captured. Heaps of businesses within 2 miles? Reasonable to set up just outside that IMO. If all busness locations are in one area the reasonable distance could be even smaller- again IMO.

I wouldnt get hung up on distance as long as you aren't next door.

Not legal advice but just look at a distance that is reasonable based on the area in case they wave lawyers around. Stick to not approaching their customers and let them come to you. Nothing can stop you advertising - that isn't approaching them individually. Just don't say you used to work there in the advert!!
 

DPinBucks

Distinguished Member
What does the contract say about what happens if you break the conditions? What I mean is, what could they do about it if it's not explicitly stated? Normally, the contract would specify disciplinary procedures for breaches of the rules, but that particular clause would have to have its own specific sanctions. They can't just say "don't do it or we'll be very cross"; they'd have to specify exactly what would happen.
 

imightbewrong

Distinguished Member
My guess (total guess) is they could sue for loss of earning due to the breach.

e.g. if he approaches a former customer and takes £100K in business from them, and it is work the former employer could do, they will sue for that amount.

There can't be 'disciplinary procedures' for this as they apply to the employee post employment.
 
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D

Deleted member 13294

Guest
When I was made redundant, I was offered a settlement agreement.

In the terms and conditions are various clauses to not poach staff, not slag off the company, etc.

For this I got enhanced redundancy pay. If I break the conditions they will sue me for the return of the additional money.
 

nheather

Distinguished Member
Hi guys ive left my job and this is in the contract can they actually inforce this? I want to start up by myself. Any thoughts any legal wizards or HR gurus here

"Competition agreement"

It is a condition of your employment, that for a period of twelve months immediately following he termination of your employment for any reason whatsoever, you will not, whether directly or indirectly as principal, agent, employee, director, partner or otherwise howsoever approach any individual who has during your period of employment been a customer of ours, if the purpose for such is to solicit business which could have been undertaken by us. Neither shall you setup a business or work for a business in any capacity, in direct competition with ourselves within a five mile radius of any of our sites, within the same twelve month period.

Unenforceable I would say - but I'm not an expert in contract law.

Cheers,

Nigel
 
Unenforceable I would say - but I'm not an expert in contract law.

Cheers,

Nigel

I remember when peter Kenton left Mufc for Chelsea and him having to spend so long on "gardening leave" before he could start work, so it must be enforceable in some circumstances
 

thedude

Distinguished Member
I remember when peter Kenton left Mufc for Chelsea and him having to spend so long on "gardening leave" before he could start work, so it must be enforceable in some circumstances
Garden leave is fully paid. That's a different scenario. If you are getting paid ain't no one moaning about that.
 

nheather

Distinguished Member
I remember when peter Kenton left Mufc for Chelsea and him having to spend so long on "gardening leave" before he could start work, so it must be enforceable in some circumstances

Firstly as IMBW has pointed out, someone on gardening leave is still under employment.

Also there is a difference to someone volunteering to act and someone being legally forced to act.

For example, I have witnessed unwritten poaching agreements enacted - if two companies mutual agree to act in this way then it can be acheived without being written down anywhere. For example employees from a customer mind find themselves failing the interview when they apply for a job at a supplier - suppliers are keen not to upset their customers - but you won't find anything written down.

Another example, an employee might choose to abide such arrangements in return for an uprated redundancy payment with a 'without predjudice' agreement.

And another example, an employer might choose to abide by such arrangements because it is a small world and he never knows when his path might cross with his ex-employer in the future.

But these have nothing to do with legality. If an employee or company choose to renege on arrangements the aggrieved company would have little recourse to legal action - though the 'without prejudice' agreement probably carries more weight.

Cheers,

Nigel
 

kbarnes70

Distinguished Member
Hi guys ive left my job and this is in the contract can they actually inforce this? I want to start up by myself. Any thoughts any legal wizards or HR gurus here

"Competition agreement"

It is a condition of your employment, that for a period of twelve months immediately following he termination of your employment for any reason whatsoever, you will not, whether directly or indirectly as principal, agent, employee, director, partner or otherwise howsoever approach any individual who has during your period of employment been a customer of ours, if the purpose for such is to solicit business which could have been undertaken by us. Neither shall you setup a business or work for a business in any capacity, in direct competition with ourselves within a five mile radius of any of our sites, within the same twelve month period.

This is a fairly standard clause. I was an employer for over 30 years and had a similar clause in my employees' contracts too. It is legally binding and can be upheld. I had one employee break the contract and it ended up in court with him losing and it cost him a lot of money in damages and costs.

There are some wrinkles - first the court will want to know what position you held and how senior it was. If you were a very low level employee the clause is unlikely to be enforceable. But if you had any influence at all on the business, its profits etc, or held a senior position, you will break such a clause at your peril. The senior manager who tried it on with my company ended up having to sell his house to pay his costs and damages.

Second, the clause above is poorly drafted. It contains no provision for another, competitive employer approaching you. It only restricts you from approaching them. I wouldn't rely on this wrinkle but the clause really should say something along the lines of "... you shall not approach.... nor shall you accept any approach from .....".

You need to consult an employment lawyer to get proper legal guidance on your position. On the face of it, the clause will prevent you from working for a competing employer.

HTH.
 

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