Got me a new job.... But also a bit of an issue.

MattC59

Handed in my notice on Monday, had my laptop & phone taken off me yesterday, so now I've got garden leave until 8th October

I suspect that I shall be spending a bit of time on my bike, but Mrs C has already been and got a ton of wall paper samples

One slight issue though, I have a 'non compete clause' in my current contract, so as you can I imagine, my current employers are getting a little arsey that I'm moving to the competition. As far as I'm aware (done a bit of googling) a non compete clause isn't worth the paper it's written on, unless there is a defined business interest a stake (competition isn't a valid business interest).

Anyone got any thoughts on the validity of non compete clauses ?

grizedaleforest

A non-compete clause is perfectly valid but usually falls down because its been poorly drafted. Definition of what is competition is particularly thorny and a common reason why they're not enforceable. I think employers might be a bit narky as you've observed, but they'll not bother further.

mfin

The thing to remember is most people who move job move to a similar job, that's the way things work, its common sense. The bother tends to start when customers follow and/or issues of intellectual copyright create enough momentum to do something about it. The contract clause itself is open to interpretation too, and if it really meant you couldn't go work for a competing business, it wouldn't be worth the paper it was written on.

You'd have to be more specific over what hypothetical scenarios you're particularly worried about for more applicable conversation on it really.

MattC59

I shall dig out he wording of the clause in my contract in the morning and post.

dylanfernley

Would affect your entitlement to benefits if you were unfortunate enough to have to claim them, seems it leaves a vague opening for litigation if things happened to change drastically---- they are covering their arses

inkyfingers

Non-compete clauses are indeed quite hard to enforce as others have said.

How much fuss they make is likely to depend on how important you are within the business. If you are a superstar salesman with personal relationships with all their best customers or a super creative with all the best product ideas then they may seek to enforce the clause, if you are somebody who has no or just occasional contact with customers or whose skills aren't totally unique then it's probably not worth their hassle.

One thing you will need to be careful about is that your contract is also likely to state that you have a duty to not disclose sensitive information about your current employer or their business to any other, and this clause is likely to apply even after you have left their employment. Clearly a certain level of common sense will prevail as to what is "sensitive" information and what is not.

Velonutter

Hi Matt,

I used to have a clause drawn into all my employees contracts, that is until my solicitor told me that it wasn't worth the paper it was written on.

The reason being in his opinion is that you cannot prevent someone from earning a living and if that means going to the competition and doing exactly the same job then so be it!

As has been said, it can prevent them taking company specific information such as print-offs/data records of all their clients, or company specific recipes etc. as that would be considered illegal, that's why most people who go to work for the competition are put on garden leave or told to leave there and then.

However, it didn't stop my staff stealing £1m of business by pretending that my company couldn't supply them and that if they faxed an order to a certain number that that company would supply, it turned out to be a fax machine at their home and I didn't find out until the day after I had been to the liquidators and the liquidator said it would be too costly to sue them so forget it!

Monty Dog

These types of terms are called restricted covenants and very difficult to enforce in reality - there's pretty well nothing an employer can do to prevent someone from leaving for the competition. However, be wary if you are thinking of taking proprietary company information to your new job - what's in your head is fine, but anything construed as 'intellectual property' could see you in difficulty.

ShutUpLegs

Is this about moving from McDonalds to Burger King?

Yellow Peril

I've seen them enforced with gusto (probably due to the fact that I work in the law industry law firms are techy about losing clients) the nature of the industry that you are in will have a bearing on enforceability.

MattC59

Well, the general consensus of opinion is that the 'Business Protection Letter' is not enforceable as its too general and too restrictive. I have various legal bods looking into the legalities of each clause at the moment. It's four pages long, so there's too much to put on here, but as a an example, it starts with:

You shall not within the prohibited area (UK) during the restricted period (6 months) :-
Accept any employment in any executive, technical or sales capacity with any business concern which is wholly or partly in competition with a Relevant Business.

So basically, it's saying that I can't go and work for the competition in my industry and in the UK. However, as this is the industry which my career is based in, European law states that they are not allowed to restrict my ability to earn. As the above clause would do so, it's unenforcable.

There are a number of I'll conceived clauses in the letter, including one which states that if any of the restrictions are judged void or ineffective, then the company can modify or change them to make them effective. Which they can, but only if I also agree to the modifications. Again, unenforcable.

And then there's their complete misunderstanding of what constitutes 'intellectual property'.

GavH

I've had one of these clauses in a contract of employment I had with an Insurance company. Basically it couldn't prevent me from joining a competitor, but it could see me in hot water for actively taking with me any of the client base. In fact, it was suggested at the time that it meant I couldn't even deal with clients of that company if they then chose to come to me at any new company in the future even if there had been no active courtship on my part. This was nonesense as legally, I could not have been held liable if people chose to, of their volition, to buy their insurances from me as opposed to my original employer.

That said, recent experience from a Financial Advisor friend leaving his company to work for a competitor and who was actively courting his clients (of which I was one) to move with him suggests that from what he was told by a solicitor who specialised in Contract Law, the clause isn't worth the paper it's written on unless he has actually stolen something. I know his former MD, who personally undertook a charm offensive in an attempt to ensure that no clients walked with the advisor in question. Either his charm offensive was succesful enough or the clause really wasn't enforceable, either way, my advisor friend was not pursued through the courts in any way.

t4tomo

My view is, they can't stop you moving jobs. It designed to stop you poaching clients etc.

Whlst on Garden leave you can't work for your new company - if they do bang goes your pay in lieu of notice.

When you join new company, it is quiyte hard for them to enforce you not speaking to your old clients. Thats why they have a period of garden leave when you are "Out of the picture" and they can speak to your cntacts and advise them you have left and introduce new contact point.

As long as you are sensible and don't call your entire old client list in week 1 then you're fine.

If they are trying to tell you you can't take up your new job then tehy are talking out of their backside.

clarkey cat

I got a letter before action for breach of a non-compete clause from an ex-employer. threw it in the bin and heard nothing more.

rick_chasey

clarkey cat wrote:

I got a letter before action for breach of a non-compete clause from an ex-employer. threw it in the bin and heard nothing more.

You maverick, you.