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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 47914
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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I work large blue chip medical company as a sales territory

Resolved Question:

I work for a large blue chip medical company as a sales territory manager. I have been with the company for 16 months. They have decided to make the division redundant in Europe and focus only in the U.S., I'm currently in redundancy consultation until October 7th and if I can not be placed elsewhere within another division of the company my role will be terminated after working a 12 week notice period.
They are giving me an enhance redundancy pay and will pay me as usual until the notice period is completed dec 30th.
My question is I have a non compete element in my contract that I can not work for competition for 6 months, but as I'm being made redundant and the business will no longer operate in Europe does that clause in the contract still stand?
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.
The fact that you are being made redundant would not remove the validity f any restrictive covenants. If you are made redundant then your contract would have been terminated correctly and would not be void, which means that the covenants can be enforceable, subject to the usual rules on reasonableness., which operate in the following ways:
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.
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. However, if you work for a competitor who is no longer in competition with the ex-employer because they have left the country or you are not using any confidential information or trade secrets then the chances of it being enforceable would be significantly reduced.
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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