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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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Dear Sir/Madam, I am in contact today for some legal advice

Customer Question

Dear Sir/Madam,
I am in contact today for some legal advice around an employment law matter regarding my employment contract, in specific, non compete and competition.
My non compete with any candidate or client is 12 months and competition 6 months, the competition preventing me working for any business competing, now or in the future with my organisation.
Story
I was headhunted to build a new practice for a recruitment agency in a space I have operated for over 10 years. I possess client relationship in and out of work.
When I was hired, I was asked to bring across and my contacts, including data and CVs to upload on their CRM, even though they were aware of my non compete with my company prior to joining the new business. I have emails of them setting up share drive accounts, asking me to hire a data entry clerk to migrate this information, and to even bring across contractors (that I declined).
I was employed for over 18 months and designed last week due to a number of valid reasons, including: company downsizing (office and staff) and more importantly bad business practice from one of the directors blacklisting us from recruiting for their organisation. My staff were very unhappy and in the space of 3 weeks I was asked to sack all my employes, apart from one junior employee.
I fully understand and appreciate non compete and competition clauses, however, I have only transacted with 2 clients under their employment but they are stating I call no one of their system, wether I contacted them or not.
Other reasons:
I came with all my own contacts and build the business from scratch with no help or support from the business - this included over 2000 contacts and 1000 CVs that I've built over 10 years.
Since my resignation, clients of mine are refusing to deal with the new business and are demanding I offer a service through another company.
My relationships with all my client are very strong, inside and outside work
Conclusion
They are sating I can't work in my market for 6 months. This is my only trade and only skill set and my only route to finding work.
They are asking to pass over all social networking accounts such as linkedin when I had them prior to joining the business.
They have sent me a letter today to reply within 48 hours or will raise to high courts for damages.
Advice
Please can you give me some advice around the non compete and competition clauses as it sounds as if it will be hard to stand up in court. Mainly due to all the contacts they have we're down to me, I came to them with the same contact list they have currently, it's the only industry I have worked in and would not be able to get a job for at least 6 months and why do I have to sign this post termination obligations document sent to me within 48 hours or a high court injunction to restrain me from further breaching of the post termination provisions.. Do I have to sign it? Surely I can argue I came with these contacts, and was me who entered them into this market? If this is all I've done surely it's unreasonable for me to risk no work as this is my only profession?
Any advice of how I can send a powerful reply to argue this would be much appreciated!?
Also if I join a company who already deal with the clients I've for a non compete against does this still apply?
Submitted: 2 years ago.
Category: Employment Law
Expert:  taratill replied 2 years ago.
Customer: Hello my name is ***** ***** I am happy to help you today. Has your ex employer suffered a financial loss as a result of you doing this?
Customer : No a gain as I've opened them up a business
Customer:

right so is this the case even if you breach the covenants that they will not lose out financially?

Customer : They have over 2000 contacts that I came across with when I joined so it's all gain it's not like I joined and took their contacts or budibess
Customer : And plus I'm moving into Consulting, not recruitment.
Customer:

Right so to be clear they will not lose contracts/ customers if you do this?

Customer : No, not necessarily. I'll be selling a different service. They sell people (recruitment) I sell solutions (consulting)
Customer:

Ok do you have the wording of the restriction they seek to enforce?

Customer : With regard to the Contract of Employment dated 1st May 2014 (“the Contract”) with Skillsearch Limited trading as EnRisk (“the Company”); and,In consideration of the Company agreeing not to make an application for injunctive relief against me for breaches of the Contract,I Carl Vellenoweth hereby undertake that I will not directly or indirectly:1. Use any Confidential Information as defined in Clause 14 of the Contract: a) For my own benefit or for the benefit of any persons; orb) For the disclosure to or for any persons. 2. For the period of twelve (12) months after the termination of my employment, ie. not before 6th November 2015 (a)​ solicit or endeavour to entice away from the Company the business or custom of a Restricted Client or Prospective Client (as defined in Clause 15 of the Contract) with a view to providing services to that Restricted Client or Prospective Client in competition with the Company or otherwise discourage, prevent, induce or entice or endeavour to discourage, prevent, induce or entice any Restricted Client or Prospective Client to cease conducting or reduce the amount of business they do with the Company; or (b)​solicit or endeavour to entice away from the Company the business or custom of a Restricted Candidate or Prospective Candidate (as defined in Clause 15 of the Contract) in competition with the Company or otherwise discourage, prevent, induce or entice or endeavour to discourage, prevent, induce or entice any Restricted Candidate or Prospective Candidate to cease conducting or reduce the amount of business they do with the Company; or (c)​in the course of any business concern which is in competition with the Company, offer to employ or engage or otherwise endeavour to entice away from the Company any Restricted Person (as defined in clause 15 of the Contract) (whether or not such person would breach their contract of employment); or (d)​be involved with the provision of services to (or otherwise have any business dealings with) any Restricted Client, Prospective Client, Restricted Candidate or any Prospective Client in the course of any business concern which is in competition with the Company; or(e)​employ or engage or facilitate the employment or engagement of any Restricted Person (whether or not such person would breach their contract of employment) in any business which is in competition with the Company; or (f)​be engaged, concerned or involved in any Capacity with any business which is or intends to be in competition with the Company in conjunction with any Restricted Person (whether or not such person would breach their contract of employment). 3. For six (6) months after the termination of my employment, ie: not before 6th May 2015, be involved in any Capacity with any business concern which is (or intends to be) in competition with the Company.
Customer : Continued..
Customer : 3. For six (6) months after the termination of my employment, ie: not before 6th May 2015, be involved in any Capacity with any business concern which is (or intends to be) in competition with the Company. 4. At any time after the Termination Date, represent myself as connected with the Company (other than as a former employee) in any Capacity, or as interested in the business of the Company, or use any registered names, trading names or logos associated with the Company.
Customer:

Ok please leave this with me to read the clause and to consider your position. I will respond in full shortly after 9 am.

Customer:

Many thanks

Customer : Ok thanks.
Customer : They have sent me this to sign and return within 24 hours otherwise they are threatening to take me to high court
Customer : My argument surely is I've had the same contacts for 10 years and they wouldn't have any contacts it it wasn't for me? And keeping me away from the market for 6 months outside of recruitment surely isn't possible?
Customer : I would of thought a contract would of been more definitive than this
Customer:

Ok thanks, ***** ***** just noticed that this is undertakings they now ask you to give, were there restrictive covenants in your employment contract as I will need to see those to answer.

Customer : I think this is a reminder of my contract but why would they ask me to sign and return in such short notice for?
Customer : In fact, I only signed a sheet that had no contract attached.
Customer : At the time, HR were being very agreesive and asked me to send it back ASAP as at the time I was off ill. The HR manager has now left the business.
Customer:

Ok first thing you need to do is to get a copy of the contract to check that the words in the letter are the same as the ones in the contract. Do not sign anything until you see the original signed contract. If the letter is from a solicitor contact them and say you are not prepared to sign anything until you see the original contract.

Customer:

On the face of it the restrictive covenant is only enforceable insorfar as it is no wider drafted than necessary to protect a legitimate business interest. If they will not lose contracts because the work you will be doing is different then they will not be enforceable. You should explain this and say you are prepared to go to court. It will cost them tens of thousands of pounds to take you to court. If they are not going to lose at least an equivalent sum they will not pursue you. They may be trying to call your bluff by asking you to sign restrictions which were not previously contained in your contract in any event.

Customer:

You have mentioned that they were your contacts originally but this does not help you at all if you entered into restrictions freely.

Customer:

Your best argument is that a) you are not competing and b) they will not suffer a loss.

Customer:

Please let me know if there is anything further you would like to know.

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