How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Ben Jones Your Own Question

Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 46144
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
29905560
Type Your Employment Law Question Here...
Ben Jones is online now

I have a Restrictive Covenant within my employment contract.

Customer Question

I have a Restrictive Covenant within my employment contract. Can I join a direct competitor?
Submitted: 5 months ago.
Category: Employment Law
Expert:  Ben Jones replied 5 months ago.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

Expert:  Ben Jones replied 5 months ago.

Do you have the wording of the restriction please?

Expert:  Ben Jones replied 5 months ago.

I will then be able to look at it later this eve thanks

Customer: replied 5 months ago.
Hi Ben - Apologies, I had sent this in the additional info field
Customer: replied 5 months ago.
I'm a currently looking to move jobs, to a direct competitor, although I have the below restrictive clause in my contract of employment. My job, and new potential job, are both field sales/account management. My interpretation of the below is that I shouldn't contact any of my current employers’ clients, try to poach any employees, or disrupt relations with suppliers (without written permission) - In addition to this, I must make my new potential employer aware of the clause (which I have and they are running through their legal team also). Please correct me if I'm wrong. One of my concerns lies within 1.1 whereby it states 'directly or indirectly', as part of my new potential job will be helping to build and grow the company which may well entice said clients in the distant future. I plan to leave on good terms although want to ensure I’m protected, just in case.Question: With this clause, am I OK to join this competitor (abiding by the clauses)? - Any guidance and pointers will be gratefully received.Restrictive Covenant1. The Employee undertakes to the company on behalf of himself and as agent that he will not (without prior written consent), whether as principal or agent, and whether alone or jointly with, or as a director, manager, partner, shareholder, employee or consultant of any other person, directly or indirectly;1.1 tender for, canvas, solicit or endeavour to entice away from the Company the business of any Customer of the Company. This restriction is limited to activities of the Employee in competition with services they provided during the Employment.1.2 offer to employ or engage or solicit the employment or engagement of any other Employee (whether or not such person would commit any breach of their contract of employment or engagement by reason of leaving the service of their employer);1.3 tender for, canvas, solicit or endeavour to entice away from the Company the business of any Supplier of the Company. This restriction is limited to activities of the Employee in competition with services they provided during the Employment.2. In the event that no duties have been assigned to the Employee by the Company during a period immediately preceding the termination of the employment then the Restricted Period will be reduced by a period equivalent to the length of time for which no duties have been assigned to the Employee.3. At no time after the termination of the Employment shall the Employee directly or indirectly represent himself as being interested in or employed by or in any way connected with the Company or any Group Company, other than as a shareholder or former employee of the company.4. The Employee agrees that they will draw the provisions of this clause to the attention of any third party who may at any time before or after the termination of the Employment offer to engage the Executive in any capacity and for whom or with whom the Executive intends to work during the Restricted Period.5. The Employee and he company agrees that, having regard to all the circumstances, the restrictions contained in this clause are reasonable and necessary for the protection of the Company and that they do not bear harshly upon him and the parties agree that:5.1 each restriction will be read and constructed independently of the other restrictions so that if one or more are found to be void or unenforceable as an unreasonable restraint of trade or for any other reason the remaining restrictions will not be affected; and5.2 if any restriction is found to be void but would be valid and enforceable if some part of it were deleted, that restriction will apply with such deletion as may be necessary to make it valid and enforceable.
Expert:  Ben Jones replied 5 months ago.

Hi there, 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.

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.

This is your basic legal position. I have more detailed advice for you in terms of the options the employer has if they think you have breached the restriction, 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 is no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you

Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 46144
Experience: Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
Ben Jones and other Employment Law Specialists are ready to help you
Customer: replied 5 months ago.
Hi Ben,Thanks for the detailed information, I have left your rating as requested.Do you consider the above to be a Post-termination restrictive covenant or a non-competition covenant?There is a level of ambiguity in the wording of the restriction which I cannot decipher (although I acknowledge your point that this may be difficult to enforce).Another question: The contract does not state any geographical location? How does this sit legally?I look forward to your other comments.
Customer: replied 5 months ago.
Hello Again,I have seen your other comment on a similar question:-"Non-solicitation covenants: To be valid, the covenant should be restricted to customers with whom the employee had contact during a specified period before leaving."Question: The restriction in question doesn't appear to outline the above. How does this affect the legality of the restriction?and"Non-dealing covenants: 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."Questions:If you consider the said restriction to be a non-dealing covenant, can I have any contact with previous clients. Would this commonly be seen as to 'endeavour' to entice clients?The company has sites nationwide and globally but it does not state anything in terms of geography in the restriction. What does this mean for the legality of the restriction?
Expert:  Ben Jones replied 5 months ago.

Hi there, restrictive covenants is the umbrella term for non-solicitation, non-dealing and non-competition covenants - these are all types of restrictive covenant.

If no geographical location is given then that makes it a kind of universal restriction so could make it more difficult to enforce, but generally only if they try and enforce it very widely, for example if you set up a business further away from their usual business area. If you are very close to them and clearly encroaching on LBIs then a geographically non-specific restriction can still apply.

As to the other questions, they do try and limit the type of customers you should not have contact with as they state: Tender for, canvas, solicit or endeavour to entice away from the Company the business of any Supplier of the Company. This restriction is limited to activities of the Employee in competition with services they provided during the Employment. - so they are limiting it to people you have dealt with and whilst not limiting it to n exact period of time, they are still not simply covering all of their clients

The restrictions are not really a non-dealing covenant they are non-solicitation and non-competition ones.

Customer: replied 5 months ago.
Hi Ben - Thanks for the information.Given that you partly view this as a non-competition restrictive covenant, in your professional experience, would you consider it to be legal to join such a competitor? - I'm conscious of your previous comment that such covenants can prevent employees working with competing businesses although with the restriction in question, I'm not sure if it's just to protect my current employers LBI's and/or to prevent me working for competitors. I assume just the LBI's but want to be crystal clear.Any final pointers, suggestions and recommendations would be great.Thanks again.
Expert:  Ben Jones replied 5 months ago.

You have to remember that the only way to actually prevent you from working for a competitor is to take you o court and convince the court that the restrictions were reasonable and should be enforceable. This very rarely happens unless there are stakes are clearly high and the employer has a lot to lose by not enforcing the restrictions. As the law on such restrictions is so wide and each situation depends on its own circumstances it is very difficult to say with any degree of certainty how enforceable a restriction would be in each case and only the courts can decide that. I would say that in the circumstances a blanket restriction from working with a competitor is unlikely to be valid but if they state that you cannot do particular work with them if it will directly affect their customers or poach their specific clients you worked with, then those could be more enforceable, but again only if they go to court and get a court decision in their favour

Customer: replied 5 months ago.
OK - Many thanks Ben. Great advice, just what I needed!
Expert:  Ben Jones replied 5 months ago.

you are welcome, all the best

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Ben Jones

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    10609
    Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
< Previous | Next >
  • http://ww2.justanswer.com/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    10609
    Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.com/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    41
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.com/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Laywer

    Satisfied Customers:

    49
    LL.B (Hons), Higher Prof. Dip. Law & Practice
  • http://ww2.justanswer.com/uploads/taratill/2010-03-09_111600_phpsik04M_c2AM.jpg taratill's Avatar

    taratill

    Solicitor

    Satisfied Customers:

    671
    15 years experience of advising on employment law matters
  • http://ww2.justanswer.com/uploads/LI/li/2014-12-19_134845_lexughes.64x64.jpg Alice H's Avatar

    Alice H

    Solicitor Advocate

    Satisfied Customers:

    99
    Partner in national law firm with 20+ years legal experience
  • /img/opt/shirt.png tdlawyer's Avatar

    tdlawyer

    Laywer

    Satisfied Customers:

    53
    Lawyer with 9 years experience in employment related issues.
 
 
 

Related Employment Law Questions