Ben Jones : Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. What would you like to achieve?
Customer: I'd like to be able to leave and take my clients with me, preferable
Customer: Sorry hit return by mistake
Customer: Preferably without ending up in court.
Ben Jones :
Apologies for the slight delay, I experienced some temporary connection issues earlier on. All seems to be resolved now so I can continue with my advice.
There are many things that may amount to a breach of contract, which could easily arise from an employer not following the contract to the letter on minor issues, all the way up to much more serious breaches. However, to claim that the whole contract was breached and declare it void you must be able to show that the alleged breaches by the employer were serious enough and go to the root of the contract, so that its further performance becomes impossible. Paying you late on a couple of occasions may not be serious enough, but reducing your salary and benefits, even with a clause allowing them to do so, could be serious enough. Saying that, no one but a court can say with certainty and it would always depend on the individual circumstances.
If you were to treat the contract as broken then the whole contract would be void, including the restrictions in it, unless there was a specific clause which made them severable and able to exist even in the event of breaches to other clauses in it.
Even if the above does not apply, you still have a potential get out clause under the law on restrictive covenants, which can make many of them unenforceable. A covenant that restricts an employee's post-termination activities will be automatically unenforceable for being in restraint of trade, unless the employer can show that it was there to protect a legitimate business interest and did so in a reasonable way.
Legitimate business interests (LBIs) are commonly accepted to include:
- Goodwill (including supplier and customer connections)
- Trade secrets and confidential information
- Stability of the workforce
An employer cannot apply a restrictive covenant just to stop someone competing with their business, but it can seek to stop that person using or damaging their LBIs by using a reasonably drafted covenant.
Non-solicitation covenants are there to prevent an employee from enticing away the customers of their ex-employer and as long as they are reasonable are the most commonly enforced type of restriction. Solicitation generally means “directly or indirectly requesting, persuading or encouraging clients of the former employer to transfer their business to their new employer". To be valid, the covenant should be restricted to customers with whom the employee had contact during a specified period before leaving. Other relevant factors may include the employee's level of seniority in the business, the extent of their role in securing new business and the length of similar restrictions in the employment contracts of competitors.
So there is a further option to argue the unenforceability of such covenants if necessary, but in any event the employer cannot be stopped from challenging you and taking you to court where you would have to defend the claim and show that you were right.
Customer: The covenant is solid, I've already had it looked at by a Solicirir
Customer: The contract has a clause that basically says if any on the terms are breached the rest of the contract would remain valid. Last couple of questions I promise.
Customer: 1) If it ends up in court can my employer be awarded his legal v
Customer: 2) If I lose in court and they award damages and I don't have sufficient funds to pay the damaged, but could over a period of time can they force me into bankruptcy?
Customer: Historically the awards have been less than the value of the clients if they were sold on.
Ben Jones :
Hi, to answer your questions:
- Yes that is a possibility, unless they are simply looking at a claim for damages for less than £10,000 in which case each party meets its own costs
- Yes that is also a possibility, they have a judgment against you and they could ask you to pay it immediately or they could petition for you bankruptcy, although by doing so they may not necessarily get anything more than what you are offering them now and with the costs involved they may decide against doing so