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Ask Michael Holly Your Own Question

Michael Holly
Michael Holly, Solicitor
Category: Law
Satisfied Customers: 6532
Experience:  I have 20 years of experience as a solicitor in litigation and other areas
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Hi His previous employer has threatened to sue my son in law

Customer Question

Hi
His previous employer has threatened to sue my son in law or breach of a compromise agreement (he is seeking the return of the full settlement). His employer has claimed that when my son in law nominated his previuos employer for an award he held on to the nomination form and when passed it to a third party, he breached the agreement by retaining and passing on his previous employer property. As the information was submitted on a proforma issued by the awarding organisation,not confidential, my son in law was the only person in his firm that had any involvement with the nomination and many and many outside firms contributed information used in the nomination we are wondering if his employer can legally claim ownership?

As it seems unlikely that his employer will suffer a loss it would also be helpful to also know how the law stands on such an imaterial issue.

I look forward to receiving your reply
Submitted: 3 years ago.
Category: Law
Expert:  Michael Holly replied 3 years ago.

Dear XXXXX

This is nonsense.What your son is law has done cannot be described as a breach of the confidentiality agreement or to have damaged his former employer in any way as the information cannot be said to be confidential information belonging to his former employer.

I hope this helps. If there are any further points please reply

Best wishes

Yours sincerely

Customer: replied 3 years ago.

Dear XXXXX


 


Thank you for your prompt reply, which is very helpful and reassuring.


 


Could you also comment on the materiality of the nomination as his previous employer is not likely to suffer a loss.


 


For information I have based the response letter on three issues:


1.Employer does not own the nomination (which you have confirmed)


2.Trivallity


3.Flawed compromise agreement as it is lacking two ke requirements.


 


However your view on the issue as to whether the nomination is material is probably all that I need.


 


Unfortunately the solicitetors letter received from his employers solicitors was wery threatening and it has shaken my son in law so further reassurance might help him sleep tonight.


 


With kind regards.


 


John

Expert:  Michael Holly replied 3 years ago.

Dear XXXXX

To help further we just need to take a step back what does the confidentiality agreement actually say, does the alleged breach link up with a term in it at all?

Was any separate consideration given by your son in law for signing the confidentiality agreement or was the money paid for the loss of employment?

Can you confirm whether your son in law was being asked to nominate due to his individual professional standing not because of his position in working for the former employer? (even if it was the latter this would not make the information confidential , I would just like to know the answer)

Yours sincerely

Michael

Customer: replied 3 years ago.

Dear XXXXX


Thank you for your prompt reply.


 


I need to mention that it is as a compromise agreement and that my son in law's previous employer is persuing this under a return of all property owned by his employer clause. Confidentiality is mentioned in the agreement but this is not what is being pursued.


 


My son in law in round figures received £19k in for compliance with the agreement, termination and of loss of employment (not taxed) and £1k (taxed) for restrictive covenants.


 


With regard to the nomination this is how I have set it out in our draft response:


 


The nomination is set out on a pro forma prepared and issued in electronic format by [ ] for use by anyone nominating a firm for one of the annual awards available. Numerous firms are mentioned in the nomination I submitted, all of whom agreed to their name being used and many of whom contributed information used in the nomination. Before it was submitted the nomination was sent to the firms involved for comment and all comments received were reflected in the final version.


 


I confirm that with the exception of [ ] MD, who I informed that the nomination had been submitted, no one at [ ] Limited had any involvement in the nomination. For the avoidance of doubt, I also confirm that I was not asked to write the nomination, that doing so was not part of my job and that I prepared the nomination of my own volition and in my own time. The document was not considered confidential by anyone involved; all the information contained therein was already in the public domain and submitting it for the award ensured that it reached a wider audience.


 


[ ] Limited was aware of the existence of the nomination, particularly as it won the award. As [ ] will be aware the property I handed over was checked by the director/manager it was relevant to, despite this no one mentioned the absence of the nomination. Furthermore I specifically asked [A B and C] if I had handed over everything and they agreed that I had. The notes of the handover meeting held on 18th March 2011 refer. If [ ] Limited believed that it owned the nomination and considered it to be of material value, surely it would have raised its absence from the property handed over at this meeting or soon thereafter.


 


I hope that this helps.


 


Kind regards.


 


John

Expert:  Michael Holly replied 3 years ago.

Dear XXXXX

Yes, it helps greatly and is an excellent response.

It appears separate consideration was given for the agreement so we cannot use that however the fact that the nomination was known about and clearly not considered part of company property at the time of handover is very important.

Perhaps there is something we do not know since this appears a trivial issue and I cannot see a judge regarding this as any kind of material breach. The employer has suffered no loss and it is all history

Yours sincerely

Michael

Customer: replied 3 years ago.

Dear XXXXX


Having spent two days or so trawling the net for ideas as to how to answer we just wanted the confidence of knowing that we here not talking nonsence.


 


Your help has given us that confidence.


 


I expect that my son in laws previous employer will have another bite of the cherry, hopefully if we need further advice we can contact you again.


 


Very many thanks and I hope that you have a healthy and prosperous new year.


 


Kindest regards.


 


John


 


 


 


 

Expert:  Michael Holly replied 3 years ago.

Dear XXXXX

It has been my pleasure and thank you for your good wishes.

If you do need to come back then you simply need to address the question to me at the start of the question.

All the best for this coming year

Yours sincerely

Michael

Michael Holly, Solicitor
Category: Law
Satisfied Customers: 6532
Experience: I have 20 years of experience as a solicitor in litigation and other areas
Michael Holly and other Law Specialists are ready to help you
Customer: replied 3 years ago.

Dear XXXXX


 


I hope that you have had a god weekend.


 


With reference to our previous correspondence as I an now happy that I have goods responses to the issues of ownership, confidenyiality and triviality I am turning my attention to the agreement itself.


 


I believe that there are three possible flaws in the agreement i.e. :


1. The specific complaint mentioned did not occur. The agreement only refers to "Your alleged complaints about wrongful, unfair or constructive dissmissal", my son in law is clear that he resigned to set up his own business and did not complain about anything.


2. The agreement says that if it is not signed by a certain date that it lapses. The agreement was not signed until a week or so after the the lapse date.


3. The act says that the agreement must state thate that the agreement complies with the act. this requirement has been omitted from the body of the agreement but it is included in Schedule 1 the statement signed by my son in laws solicitor.


 


Is there anything here we can use?


 


I look forward to hearing from you.


 


With kind regards.


 


John

Expert:  Michael Holly replied 3 years ago.

Dear XXXXX

These agreements are designed to prevent an employee from claiming unfair dismissal etc -employment related matters, after accepting the money.They often contain a confidentiality clause but that clause prevents them from telling other employees how much they got to prevent others from squabbling about the amount they are going to get.

Your son in law has neither claimed in respect of the termination of his employment nor breached confidentiality. It is possible that there is a clause saying that if they subsequently discover that he somehow breached his contract whilst employed they can claim it back but in the absence of such a clause there is no basis for a claim against him whatsoever.Further more even if such a clause exists we deny he was in breach of it since it was a personal nomination that his employers were aware of and did not care about at the time.

As an aside I would like to know what has happened that has suddenly made this so important but perhaps we will never know.

Yours sincerely

Michael

Customer: replied 3 years ago.


Dear XXXXX


 


This is the second occasion that my son in law's previous employer has demanded the return of the settlement. On the first occasion he claimed that my son in law had offered another employee a job but when we asked for the evidence everything went quiet. It may be helpful to mention that to this day my son in law is struggling to get the business off the ground and still has not appointed a member of staff. Now a year later his previous employer claims that my son in law passed the nomination to a third party and is now trying to get the settlement back on this basis.


 


The compromise agreement contains the clause you mention and expands it to remind my son that under his contract of employment in law he still owes his former employer a duty of confidentiality in respect of employer confidential information.


 


I have set out below my son in law's proposed response and I would be grateful if you could read it through and let me know of any final comments you may have:


 



With reference to your letter of 18th December 2012 I have now had an opportunity to consider the issues and to seek appropriate advice.


 


In essence the allegation is that I passed a document belonging to [ ] to a third party. The document in question is a completed Nomination Form that I submitted nominating [ ] for the Operator of the Year Award under the Innovation Awards 2010 scheme run by [ ].


 


The nomination is set out on a pro forma prepared and issued in electronic format by [ ] for use by anyone nominating a firm for one of the annual awards available. Numerous firms are mentioned in the nomination, all of whom agreed to their name being used and many of whom contributed information used in the nomination. Before it was submitted the nomination was sent to the firms involved for comment and all comments received were reflected in the final version.


 


I confirm that with the exception of [MD], who I informed that the nomination had been submitted, no one at [ ] had any involvement in the nomination. For the avoidance of doubt, I also confirm that I was not asked to write the nomination, that doing so was not part of my job and that I prepared the nomination of my own volition and in my own time. The document was not considered confidential by anyone involved; all the information contained therein was already in the public domain and submitting it for the award ensured that it reached a wider audience. [ ] was aware of the existence of the nomination, particularly as it won the award. If [ ] felt that the information contained in the nomination was confidential it would have raised the issue with me at the time.


 


[ ] will be aware the property I handed over before I left the company was checked by the five director/managers it was relevant to. Despite this no one mentioned the absence of the nomination. Furthermore I specifically asked [A,B and C] if I had handed over everything and they agreed that I had. The notes of the handover meeting held on 18th March 2011 refer. If [ ] believed that it owned the nomination, that it contained confidential information and considered it to be of material value, surely it would have raised its absence from the property handed over at this meeting or soon thereafter.


 


In light of the foregoing and advice received I do not believe that [ ] owns the nomination nor do I believe that the contents include Employer’s confidential information.


 


The next issue to address is the reasonableness of your demand for the return of the full settlement for such a trivial matter. Case law now suggests that employers are only entitled to recover a sum equal to their loss. As I believe that [ ] has not suffered a loss, the demand for the return of the full settlement is wholly unreasonable.


 


The compromise agreement is silent with regard to how much is repayable if the agreement is breached. Moreover case law has shown that where employers have introduced a clause that requires the return of the full settlement for an immaterial breach the clause has been deemed to be an unenforceable penalty clause.


 


In any event Brian in particular will be aware that [ ] delayed my departure from the firm and limited my ability to obtain alternative employment by asking me to be available for the equivalent of ten days as required up to the end of July 2011. Consequently the settlement included pay for the period 30th April to 31st July 2011 which under any reasonable scenario should not be refundable. [ ] letter of 5th April 2011 refers.


 


A fundamental pre-requisite for the use of a compromise agreement is that there must be a dispute and that this dispute relates to the particular complaint listed in the agreement. Notwithstanding the wording of Clause 7.5.1, which incorrectly implies that I complained about wrongful, unfair or constructive dismissal, for the avoidance of doubt I confirm that I did not raise wrongful, unfair or constructive dismissal with [ ] and that at the time I signed the compromise agreement I was not in dispute with [ ] in this regard. Therefore a key requirement of the Act has not been satisfied.


 


In summary, it is clear that [ ] does not own the nomination, that the nomination is not Employer’s confidential information, that there has not been a material breach of the compromise agreement and that the agreement is flawed.


 


Yours faithfully

Expert:  Michael Holly replied 3 years ago.

Dear XXXXX

Very good, I cannot think of anything else to add.

Yours sincerely

Michael

Customer: replied 3 years ago.


Dear XXXXX


 


Once again thank you for your help and supportive comments. We will send the letter off and see what happens. As my sonin law's previous employer's solicitor now says that he has been instructed to start proceedings if you could let us have a summary of what we can expect to follow it would be most helpful. I.e. will the court just set a date for the hearinig and leave it to us to be there with a solicitor to present or case. or will there be some consideration of the issues before the courts decide if there is a case to answer. alternatively if you know of a puplication that sets out the process this would be equally helpful.


 


With kind regards.


 


John

Expert:  Michael Holly replied 3 years ago.

Dear XXXXX

The first thing is to see whether he actually does start proceedings or whether this is more posturing however if they do your son in law can expect a claim form. He will have to acknowledge it by returning a form that comes in the pack with the claim form and file a defence.

There are several articles on the internet that set out an overview of the steps in civil proceedings.

Yours sincerely

Michael

Customer: replied 3 years ago.


Many thanks Michael


If you are interested I will let you know how things go in due course.


Kind regards.


John


 

Expert:  Michael Holly replied 3 years ago.

Dear John

Yes, please do

Yours sincerely

Michael

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