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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 48206
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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I recently quit my role as enterprise account manager at

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Hi- I recently quit my role as enterprise account manager at a global IT company with about 2000 clients total (about 200 in UK) to start a new business with a competing product. My employment contract for that role sets out a clause:
"for a period of 6 months directly or indirectly entice solicit or endeavour to entice or solicit away from the Company or any Associated Company the business of any person, firm or company who during the period of 12 months preceding the date of such termination was a client of the Company or Associated Company with whom the Employee had contact as an employee of the Company. For the purposes of this sub-clause "client" shall include any 3rd party with whom the Company or any Associated Company was (during the said period) in negotiation in respect of the provision of goods or services or to whom the Company or any Associated Company has (during the said period) made or been requested to make an offer to provide services."
there is also a separate no poaching of employees and no interfere with vendors - but there is not a specific no-compete. NB I was a relatively junior employee in a firm with about 350 staff I had no one reporting to me - there are approx 5 direct sales people and approx 5 reseller partners covering sales in the UK.
So- my questions are:
(i) the wording is a bit ambiguous to my eye - does this mean "a client of the Company with whom the Employee had contact as an employee" [I had an assigned account list of 40 direct clients and prospects in my enterprise account manager role] or could it be read as "any client of any Associated Company with whom the Employee had contact as an employee" [I did have occasional contact with several reseller partners in the UK and many smaller clients were served indirectly by these resellers even though I was not responsible for the reseller sales business and had no contact at all with, or knowledge of, the end clients]
(ii) if the wider reading of (i) could be applied, then it could also encompass international clients since I met US and European resellers occasionally at conferences and training events even though I had a purely UK & Ireland role. Would this also imply restrictions beyond the UK?
(iii) in my new business, I am considering taking the role / title of CEO - in practice this means that I would need to prepare a web site and to drive general advertising (mailshots, google adwords) and general sales campaigns to generate business in a hands on fashion - it may occasionally be the case that this attracts a client of the Company - is such general activity permitted? [specifically I do not have a list of all clients of the Company so could not be expected to screen inbound requests beyond my direct client contacts, right?]
Thanks for your help!
Submitted: 1 year ago.
Category: Employment Law
Expert:  Ben Jones replied 1 year ago.
Hello I am an employment solicitor, let me consider these and I will get back to you thanks
Customer: replied 1 year ago.
OK
Expert:  Ben Jones replied 1 year ago.
Many thanks for your patience. To answer your questions: {C}(i) the wording deals with clients of the Company OR any of its Associated Companies, with such clients being those with whom the employee had contact with in the 12 months preceding their termination. Such contact should have been contact you had as an employee of the company, so it would not include any outside dealings you may have had{C}(ii) the wording does say ‘any’ so it could potentially include client outside of the UK. However, such wide restrictions would be more difficult to enforce – the wider it gets the more difficulty there is in enforcing them.{C}(iii) You are unlikely to be prevented from having general dealings or even attracting the old employer’s clients. That is often unrealistic and can be seen as a restraint of trade. What the restrictions want is to ensure that you do not use your direct influence you enjoyed in your old position or knowledge of client lists and confidential information to drive business away from them. So if you just do general advertising and have no direct influence then you are unlikely to be covered under the restrictions. This is your basic legal position. I have more detailed advice for you in terms of the law n restrictive covenants and how their enforceability is determined, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, there I no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you
Expert:  Ben Jones replied 1 year ago.
Hello, I see you have read my response to your query. Please let me know if this has answered your original question and if you need me to discuss the next steps in more detail? In the meantime please take a second to leave a positive rating by selecting 3, 4 or 5 starts from the top of the page. The question will not close and I can continue with my advice as discussed. Thank you
Expert:  Ben Jones replied 1 year ago.
Hello, do you need any further assistance or are you happy with the above response? Look forward to hearing from you.
Ben Jones and other Employment Law Specialists are ready to help you
Expert:  Ben Jones replied 1 year ago.
Thank you. 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.