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taratill
taratill, Solicitor
Category: Employment Law
Satisfied Customers: 6305
Experience:  15 years experience of advising on employment law matters
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Hi, In my appointment letter there is a ‘Post Termination

Resolved Question:

Hi,

In my appointment letter there is a ‘Post Termination Restriction’. Now I got another offer from different company but working for the same client, here I am joining to different team/business which the current company is not involved.

What I need to understand know is ‘ Does this restrict/stops me join another company and working for the same client?’. Are there any issues if I work for the same client?

Here is the Covenant clause from my company:

Post Termination Restriction:


Brief:

In order to protect the Confidential information to which the Employee has access as a result of Employment, the Employee covenants with XYZ (for itself and as trustee and agent for each Group Company) to not:

a. For twelve months after Termination, solicit or endeavour to entice away from CACI or any Group Company the business or custom of a Restricted Customer with a view to providing Products or Services to that Restricted Customer

b. For twelve months after Termination, offer to employ or engage or otherwise endeavour to entice away from XYZ or any group company any restricted person

c. for twelve months after termination, directly or indirectly assist a third party from approaching, soliciting or offering employment to any restricted person.

d. for six months after termination, be involved in any company with any business concern which is (or intends to be) in competition with any restricted business.

e. for twelve months after termination, be involved with providing products or services to or otherwise have any business dealings with any restricted customer.


Restricted Person:

Anyone employed or engaged by XYZ and when whom the employee had contact with in the six months period prior to termination in the course of his/her employment.

Restricted Customer:

Any firm, company or person who was a customer, prospective customer, supplier or prospective supplier of XYZ with which the employee was involved to a reasonable extent in the twelve months prior to termination.
Submitted: 3 years ago.
Category: Employment Law
Expert:  taratill replied 3 years ago.

taratill :

Hello my name is XXXXX XXXXX I am happy to help you today. You mention that the restrictive covenant is in your appointment letter. Can you confirm that you actually have worked for the employer and whether you had to sign the appointment letter?

Customer:

currently I am working with employer. In my appointment letter there is a Post Termination Restrictions.

Customer:

Now I got a new offer from different employer but for the same client

taratill :

Ok thanks how long have you been with your current employer?

Customer:

9 months

taratill :

Thanks, XXXXX XXXXX the restrictions were in the offer letter? Is this in the form of a contract, i.e. did you have to sign it?

Customer:

yes

Customer:

if you want see the contract I can attach two page restrictions

taratill :

Is your employer likely to suffer a financial loss if you go to work for this new employer? For example are they likely to lose this client?

Customer:

no

taratill :

Was that No they will not lose the client or suffer a financial loss?

Customer:

no means no impact on the business

taratill :

Thanks for clarifying. Technically you will be in breach of contract if you do this. This means that theoretically you could be sued in breach of contract for damages arising from the breach. This is why I asked if the employer would suffer a loss, damages can only be claimed in the event that the employer loses money as a result of you doing this. If they will not lose anything they cannot claim damages. In addition it costs an employer tens of thousands of pounds to enforce this kind of clause and they simply will not bother if they are not going to lose out financially.

taratill :

If there is anything else you would like to know about this please do let me know.

Customer:

Can they ask for 12 months compensations if I join other company?

taratill :

Not if they will not lose out financially by you doing this.

Customer:

can they stop me working through the client?

taratill :

Technically they could take out an injunction to prevent you from breaching the clauses of the contract. However given that it will cost them tens of thousands of pounds in legal fees to do this they simply will not bother if you are not going to cause their business to suffer the equivalent loss.

Customer:

in case if they send a legal notice .. do I need to approach solicitor and does this cost me lot of money?

taratill :

You would be advised to see a solicitor if they do threaten you with proceedings (I think this is highly unlikely on the basis of what you say) You would have to pay legal costs if they do. If you have home insurance you may find that this covers legal costs so this might be worth looking at.

Customer:

normally in the business can they have any sort similar agreement with the client?

taratill :

Yes they can have restrictions in client contracts. The client probably would not agree to them though.

taratill :

Please let me know if there is anything further you would like to know about this. If I have answered your question I would be grateful if you would take the time to rate my answer. Thank you and all the best.

Customer:

from your advice, it is very clear that if I am not directly involved in any sort their business impact, then they can't legally trouble me. Is this correct?

taratill :

Yes correct. They would not take action unless your actions impact their business financially

Customer:

I am just a employee not involved in their business dealings .. Hope I can take the risk to join other company?

taratill :

You are in breach of the restrictive covenants BUT they will not take action unless the impact of you joining the other company would result in a loss of income to the other company.

taratill :

Sorry I meant would result in a loss of income to your current employer.

Customer:

just looked at my house insurance, it says legal actions by you or members of your household. That means, any legal issues I can claim from the house insurance?

taratill :

Yes.

taratill :

If there is anything else you would like to know please let me know. Please take the time to rate my answer as it is an important part of the process.

Customer:

do you want to see my contract papers?

taratill :

I really do not need to see them but thanks for the offer.

Customer:

thanks for the clarification. At the moment I don't have any further questions. In case if I come back to you again. Do I need to pay again?

taratill :

Hi once you have rated my answer you can ask follow on questions and you will not have to pay again.

Customer:

thanks

taratill, Solicitor
Category: Employment Law
Satisfied Customers: 6305
Experience: 15 years experience of advising on employment law matters
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