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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
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I have a Non Compete clause in my contract but the organisation

Resolved Question:

I have a Non Compete clause in my contract but the organisation I work for is not investing in the products and sales are down. HR will not offer me a waiver to the Non Compete, if I resign voluntarily.
I have an offer (with a 30% increment on my base salary). Is there a way in which I can resign and insist on a release letter with a waiver to the Non Compete clause which will allow me to work for the competition.
Submitted: 1 year ago.
Category: Employment Law
Expert:  Ben Jones replied 1 year ago.
Hello, my name is ***** ***** it is my pleasure to assist you with your question today. ow would working for the competition affect your current employer, would you be dealing with existing clients, poach any business from them, etc?
Customer: replied 1 year ago.

There will be some cross over of opportunities however I am prepared to provide a list of embargo deals that I will not engage with if the waiver is granted

The clause referenced in my contract is:

17.2 You acknowledge that:-

17.2.1 each of the restrictions in clause 17 goes no further than is necessary to

protect the legitimate business interests of the Company and any

Associated Company;

17.2.2 each of the restrictions in clause17 applies regardless of the reason for

the termination of your employment

17.2.3 the Company is entering into this Agreement not only for itself but as

trustee for each Associated Company and with the intention that the

Company and/or any Associated Company will be entitled to seek the

protection of and enforce each of its restrictions directly against you. If

requested to do so by the Company however, you will at any time sign

a document with any such Associated Company evidencing the above

restrictions.

17.3 The provisions contained in Clause 16 and 17.1 shall be for the benefit of the

Company (and, where there is a transfer of the business, the Company’s

successor in title).

17.4 Following the date your employment terminates, you will not:

(a) represent yourself as being in any way connected with the business of

the Company or any Associated Company (except to the extent agreed

by such company);

(b) represent, promote or advertise or refer to your previous connection with

the Company or any Associated Company in such a way as to utilise any

of their goodwill; or

(c) carry on, cause or permit to be carried on any business under or using

any name, trade mark, service mark, style, logo, get-up or image which

is or has been used by the Company or any Associated Company, or

which in the reasonable opinion of the Company, is calculated to cause

confusion with such a name, trade mark, service mark, style, logo, getup

or image or infer a connection with the Company or any Associated

Company.

Customer: replied 1 year ago.

First part of clause 17

17. Restrictions on Competition

17.1 You will not (without the prior written consent of the Company) for the first 12 months after the termination of your employment with the Company (or, if you are required by the Company to take Garden Leave under clause 20 during the Notice Period, then for the first 12 months from the day on which you commence Garden Leave):

17.1.1 for whatever reason either on your own account or on behalf of any other legal person in competition with the Company or any Associated Company directly or indirectly engage nor be concerned with any trade or business carried on by us or any Associated Company at the end of your employment, except with the Company’s express written consent, which will not be unreasonably withheld.

17.1.2 solicit or accept orders for services competitive with the Company from

any clients of the Company or any Associated Company with whom you dealt with within the last twelve (12) months of your employment with the Company (or, if applicable, the last twelve (12) months of your

employment with the Company prior to the day on which you are

required to take Garden Leave).

17.1.3 solicit away from the Company or any Associated Company any person as a director, senior manager or employee for whom you were responsible during the last twelve (12)months of your employment (or, if applicable, the last twelve (12) months of your employment with the Company prior to the day on which you are required to take Garden Leave).

Expert:  Ben Jones replied 1 year ago.
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. You cannot force the employer to issue a waiver in any way and if they refuse to then you would have to try and deal with this by seeing whether they can actually enforce any of these restrictions.
There are a few different types of restrictive covenants that can be applied, these being:
1. 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.
2. Non-dealing covenants are a wider restriction and not only restrict solicitation but any other general contact with clients. The enforceability of a non-dealing covenant will depend on the interest being protected and can be influenced by a substantial personal connection the employee enjoys with a specific client. However, such a covenant will not be enforceable if it prevents any sort of contact with the client. The restriction must be focused on the specific type of contact that would directly affect the employer's business.
3. 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.
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.
I hope this has answered your query. Please take a second to leave a positive rating, or if you need me to clarify anything before you go - please get back to me and I will assist further as best as I can. Thank you
Customer: replied 1 year ago.

I understand the need for the restriction, but wanted to validate whether under law:

1. Once I tender my voluntary resignation, can I insist on my employer providing me with the waiver as a mandatory requirement prior to my exit?

or

2. If my employer decides to terminate my employment, do I have a right to request for the waiver and can I insist that this waiver must be provided to me?

Expert:  Ben Jones replied 1 year ago.
there are no situations where you can require the employer to waiver this restriction. Whether a waiver is provided is entirely at their discretion and you cannot force them to do so. You can negotiate to have this done but you cannot force them to issue a waiver. Hope this clarifies a bit more?
Customer: replied 1 year ago.

Helpful but not quite what I wanted to hear

I guess the only alternative I have is to negotiate the letter for lifting the Non Compete and then hand in my resignation

Expert:  Ben Jones replied 1 year ago.
Yes that is an option but be careful what terms you negotiate and don't have something which may render the agreement invalid should you resign. So you need to read the terms of any agreement very carefully
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 46743
Experience: Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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