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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 47917
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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Resolved Question:

I am employed by a care company and in the employee's hand book it states ....Competition Agreement..... It is a condition of your employment that,when your employment is terminated,for whatever reason,you may not,for a period of 12 months after the termination of your employment,approach any individual or organisation who has,during the period of your employment,been a customer,if the purpose of such an approach is to solicit business which could otherwise have been undertaken by us...... but the customer has approached me and ask me if I would work for them privately,can my present employer sue me if I resign and then work for the customer

Submitted: 2 years ago.
Category: Employment Law
Expert:  Ben Jones replied 2 years ago.
Hello, my name is***** am a solicitor on this site and it is my pleasure to assist you with your question today. Is there anything which says you cannot work for a customer regardless of who approached who or is this the only restriction?
Customer: replied 2 years ago.

Hello Ben

There is a section " Private work for Clients " but that is if you are still employed with the company. I wrote the section under Competition Agreement word for word for you and I can't find anything else within the Employee handbook,so it only says if I approach the customer not if the customer approach me

.

Regards

Annalisa

Expert:  Ben Jones replied 2 years ago.
Strictly speaking this restriction would not cover you because you are not the one contacting the customer and trying to ‘steal’ their business away from your employer. Even if such a restriction existed it will not necessarily be enforceable.
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. 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 trust this has answered your query. I would be grateful if you could please take a second to leave a positive rating (selecting 3, 4 or 5 starts at the top of the page). If for any reason you are unhappy with my response or if you need me to clarify anything before you go - please get back to me on here and I will assist further as best as I can. Thank you
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