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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 47418
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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Hi, After termination of my employment, initiated by me,

Customer Question

Hi,
After termination of my employment, initiated by me, who shall pay my gap in salary during a non compete period, The employer who wants to enforce the non compete clause or the new employer?
Kind regards
Shg
Submitted: 2 years ago.
Category: Employment Law
Expert:  Ben Jones replied 2 years ago.
Ben Jones :

Hello, my name is ***** ***** it is my pleasure to assist you with your question today. I am afraid that no one is liable to pay your salary during a non-compete period - there is simply no law holding anyone liable for this. During such periods you are expected to adhere to the restrictive covenants and engage in other work that does not infringe the restrictions. But it does not mean that if you cannot find such work anyone would have to pay your salary in the meantime. It does not mean that an employer would not be willing to offer you a discretionary payment to cover this, but that is very rarely done and as mentioned it is entirely at the employer's discretion, they would not in any case be legally obliged to pay you.

Customer: Hi again,
Customer: Thank you for a very clear answer.
Customer: My current agreement states
Customer: 16.1 The Employee hereby undertakes that he will not without the Company's prior written approval, whether by himself or on behalf of any other person, firm, company or organisation, whether directly or indirectly, during the period of six months immediately following the termination of the Employee's employment within the Restricted Territory be engaged, concerned or interested in, whether as a principal, shareholder, partner, employee or agent in any business which supplies Restricted Products or Services in competition with the Company or any Group Company
Customer: if my current work is within Europe and I progress with a competitor, am then not subject to this clause?
Ben Jones :

Post-termination restrictive covenants are a rather common occurrence in employment relationships. An employer would want to protect their business from a departing employee's knowledge, business connections, influence over remaining staff, etc. However, 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-competition covenants prevent an employee from working with a competing business or setting up to work in competition with their ex-employer. Such general restrictions are seen as a restraint of trade and will be difficult to enforce. They will only be seen as reasonable if in the process of working in competition, the employee uses trade secrets or sensitive confidential information belonging to their ex-employer, or their influence over clients is so great that such a restriction is necessary. The length of the restriction and its geographical coverage will also be relevant.

As you can see there are no hard and fast rules on restrictive covenants. Whether a specific restriction is enforceable will always depend on the individual circumstances, the interest being protected and whether it has been reasonably drafted. The above principles are what the courts will consider when deciding whether a restriction is going to be legally enforceable. It should give you a good idea of what to look for in your situation and decide what the chances of this being pursued further are.


Ben Jones and other Employment Law Specialists are ready to help you
Customer: replied 2 years ago.

Hi again


 


One of the LBI you mentionned is "Trade secrets and confidential information".


Could it be considered that what I have in my head from the time I worked at my company would constitute trade secret...What constitutes trade secrets and confidentitial info?


 


Also, in practice, how is this best handled in the exit. Just to clarify, I have no intention of competiting ireasonably with my company with for instance contacting existing customers/prospects or using confidential information. I might engage in the restricted territory with prospects which have never been in the former company's roadmal and potentially who are customers of my new company. Shall I ask for something in writing for my former employer as stated in my clause "Employee hereby undertakes that he will not without the Company's prior written approval"...and what would that be? Or shall I just assume I do not need anything in writing since I will not irreasonably compete with them?


 


Thanks again

Expert:  Ben Jones replied 2 years ago.
What you have in your head could be considered confidential information if it is information which you have obtained through your employment with the company and can only be attributed to them.

If you have no intention to compete against them then you do not have to do anything - you simply leave and mind your own business and there is not much they can do if you have not broken any of the restrictions.

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