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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
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Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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In my contract there is a restriction to prevent me working

Resolved Question:

In my contract there is a restriction to prevent me working for another company in the same line of work for 6 months. however my role has changed is this still enforceable? does this not stop me from getting another job if this is the industry I have experience and skill in?
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.

Ben Jones :

If you were to get such a job with a competitor, would you be using any confidential information obtained from the current employer, or poach clients, etc?

Customer:

The situation is that I was originally employed as Operations Manager for a tour operator, but my role has now moved slowly to more sales orientated. I have never been told officially i am no longer operations manager although my role has changed. However this week we have new business cards following a rebrand and my new role is group travel manager (which most of us are) and another employer has Operations Manager on their card. As far as yet I have not been told I am no longer in this role and that the other person has taken the role and title. - My contract does state that they employer can change my role to a suitable role so I am guessing this is covered...

However further down it states that I can not work for a competitor or employer in direct competition for 6 months. Obviouslt being an operations manager in the travel industry it is always going to be a competitor as it is a niche market?

Customer:

The potential new employer does run the same sort of trips so i would be competing for the same market and could use the same supplyers

Ben Jones :

ok thanks let me get my response ready please

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, such as the one in your case, 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.

Whilst restrictive covenants are mainly used as a scare tactic by employers, if an employee has acted in breach of a covenant and the employer is intent on pursuing the matter further they can do so. The following are potential outcomes if the employer takes legal action:



  • Obtain an interim injunction preventing the employee from doing certain things that would make them in breach of the restrictive covenant

  • Seek compensation for damages that have directly resulted from the breach of the covenants


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 :

Hope this clarifies your position? If you could please let me know that would be great, thank you

Customer:

OK Thank you, ***** ***** this makes it slightly clearer.

It is a direct competitor in many aspects, but there are certain areas that do not cross over. It is also in a similar geographic location which I appreciate is another aspect.

Customer:

If i understand correctly providing I am dealing with clients that are already on the other companies database and withhold from contacting my current employers clients and suppliers then i should be OK?

I did think it was more a scare mongering case...

Many thanks

Ben Jones :

yes you are correct in your understanding - you cannot just be prevented from working for them because they are a competitor. Only if you are directly affecting their legitimate business interests, so for example using trade secrets, client lists, confidential information, etc which means that you are giving the competitor an advantage over them would such restrictions be enforceable. So they would generally be used as a scare tactic more than anything else.

Ben Jones :

Hope this answers your follow up query?

Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 46794
Experience: Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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