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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 46792
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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I have just left a job with a large company and want

Resolved Question:

Hi
I have just left a job with a large company and want to go self-employed working in the same industry. The contract with my previous employer states that I cannot work in the same industry for six months or work with any of their clients.
If I upheld these restrictions I would not be able to make a living. Are these restrictions enforceable?
I would appreciate your advice on this,
Rachel Holmes
Submitted: 1 year ago.
Category: Employment Law
Expert:  Ben Jones replied 1 year ago.
Hello, my name is***** am a qualified solicitor and it is my pleasure to assist you with your question today. can you tell me how long you were with your previous employers and the nature of you work please.
Customer: replied 1 year ago.
Hi Ben,I am an Environmental Consultant. I worked for SLR Consulting for 13 months.I was involved in giving advice on environmental issues to numerous clients, including large companies such as Bloor Homes, Kier and various planner and architects. If I cannot work with these companies for months it will severely impede my business.
Expert:  Ben Jones replied 1 year ago.
Thank you for your response. I will review the relevant information and will get back to you as soon as possible. Please do not respond to this message as it will just push your question to the back of the queue and you may experience delays.
Expert:  Ben Jones replied 1 year ago.
Many thanks for your patience. 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 hope this has answered your query. I would be grateful if you could please take a second to leave a positive rating (3, 4 or 5 stars) as that is an important part of our process and recognises the time I have spent assisting you. 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
Customer: replied 1 year ago.
Many thanks for your response. This is clearly a grey area.
SLR are a large company who work with all of the major development and planning companies in the UK, so being barred from working with their clients would be very restrictive. I have also undertaken projects for many of SLR's clients before I joined the company. Would the restrictions apply if I had contacts with the clients prior to working for SLR?
Expert:  Ben Jones replied 1 year ago.
That would make it less likely that they would be enforceable. Companies know that such restrictions are often unenforceable, at least to the full extent in which they are drafted, but are still included as a deterrent and in the hope that the employee will restrict their activities as much as possible as a result. But when it comes to a court forcing the employee to adhere to them, that is much more difficult. Hope this clarifies?
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 46792
Experience: Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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