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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 44941
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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Good Evening,I have had a breach of contract letter come

Customer Question

Good Evening, I have had a breach of contract letter come through to me this afternoon from my previous employer, where they have issued a cease and desist for contacting their customers and suppliers, however on their website for the past week they have been directing support and further information enquiries directly to my new job email address and my personal email address, it was live when the scanned letter was sent.


 


Some background info:


 


The company I was previously employed at was selling the products at the company that I now work for, their biggest partner which subsequently provides 60% of their turnover has decided to purchase the product elsewhere, this has been on the cards for sometime now, as they have been asking to purchase elsewhere for at least 1 year, my new company has records for this, I have only been at the new company, their supplier for 1 month. The account however was mine until 2 months before I left the company, one of the reasons for leaving.


 


My ex employer has blamed me for the loss of their business as well as making libelious and defamatory comments to third parties, hence the subsequent cease and desist notice. My new company terminated our partnership with them today, due to severly overdue debts,  and libelious comments.


 


My ex-employee owes a lot of money to my new employer.


 


Please help


 


My ex-employer is based in Jersey, but most UK regulations stand.


 


 


Regards


 


 


 


James

Submitted: 3 years ago.
Category: Law
Expert:  Ben Jones replied 3 years ago.
Hello, my name is XXXXX XXXXX it is my pleasure to be able to assist with your question today. Please let me know if you had any specific restrictive covenants on your contract with them?

PS: I am just going offline so will pick this up tomorrow if that is ok, thanks
Customer: replied 3 years ago.
This is what I have, issued to all staff, no matter what their position.Also I ceased to be an employee at the end of December 2012, and I became a self employed contractor for my last two months, I was never issued with a temporary contract even after asking on a couple of occasions. (11.ConfidentialityYou should not (except in the proper course of your duties) either or after your period of employment, divulge to any person, and must use your best endeavours to prevent the publication or disclosure of any trade secret document (electronic or otherwise) , or property or any other information concerning the business or finances of the company.All databases, notes, memoranda, trade secrets, computer program's, data, email, or any other electronic or non-electronic information created, received, or made available for access by you during the course of your employment, are the property of the company and must be surrendered by you, to the company at the termination of your employment at the request of the management.) Sorry also in my original post, it was meant to say that my ex-employer has been making libellous comments, it read differently. I have not made these comments.
Expert:  Ben Jones replied 3 years ago.
Thanks for your patience. It is common for employers to want to protect their business interests from unfair competition by current and ex-employees. This applies especially to employees who have knowledge of sensitive and valuable information, have considerable influence over the workforce or have strong customer connections. However, at the same time it is in the public interest to ensure that employees are free to move between employers and use their skills, knowledge and experience in a new setting. Also these restrictions can only really be applied using restrictive covenants that have been agreed prior to the termination of one's employment - they cannot be applied retrospectively.

Whilst employers try and impose certain restrictions on their employees, under the doctrine of restraint of trade, any contractual term which seeks to restrict an individual's freedom to work for others or carry out his trade or business is illegal and unenforceable. The exception is when the employer can show it has a legitimate business interest that requires protection.

Legitimate business interests (LBIs) are commonly accepted to include:
• Trade secrets and confidential information
• Trade or customer connections
• Stability of the workforce

An employer cannot impose a restrictive covenant merely to stop someone competing, but it can seek to stop that person using or damaging something which legitimately belongs to it, such as an LBI.

The most common restrictions are:

1. Non-solicitation covenants - preventing an employee from contacting the customers of their ex-employer. Recent case law has suggested that solicitation means “directly or indirectly requesting, persuading or encouraging clients of the former employer to transfer their business to their new employer". This 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, the length of similar restrictions in the employment contracts of competitors. Generally, restrictions against potential customers will be harder to enforce.
2. Non-dealing covenants – this is a more general restriction and not only restricts solicitation but any other general contact with them, even if they are the ones that have approached the employee in the first place. The enforceability of a non-dealing covenant will depend on the interest being protected. Similar considerations as for the enforcement of non-solicitation covenants will generally apply, although the much wider scope of such covenants will make them harder to enforce.
3. Non-competition covenants – these will generally be unenforceable, unless the employer can justify their use. As a matter of general law, once they leave employees are restricted from disclosing confidential information amounting to a trade secret. As with non-solicitation covenants, the restriction must be for a limited time. The geographical extent of the limitation must also be considered. Worldwide covenants have been held to be enforceable, but more specific restrictions can be enforceable if considered reasonable in the circumstances.

There are a couple of options open to employers when trying to enforce restrictive covenants:
• Obtain an interim injunction - this will result in a court issuing an injunction stopping the employee from doing certain things, such as dealing with specific clients
• Seek compensation for damages that have resulted from the breach of the covenant(s)

In summary, the law on restrictive covenants is very subjective and depends largely on the individual circumstances of the business and the LBI that needs to be protected. There are no set rules and procedures, apart from the requirement for the restrictions to be reasonable and go no further than is required in the circumstances. Therefore, it is usually only down to the courts to establish whether a restriction is enforceable and, if so, whether an injunction should be granted or damages should be awarded.

Please take a second to leave a positive rating as that is a very important part of our process. Your question will not close and I can continue providing further advice if necessary. Thank you
Customer: replied 3 years ago.

Thanks Ben, just to clarify really that due to the fact my ex-employee has pushed its clients directly to me, and without me contacting them would have meant a loss to my new company.

 

It is also worth noting that the customers of my ex-employee are buying the same product, our product that we manufacture, it was only yesterday that we terminated with them as they had blocked any form of contact with them, previously I would have contacted their clients to support them, as this is my job. The business would have them gone through my ex-employer.

 

Does he really stand a chance with his claim?

Expert:  Ben Jones replied 3 years ago.
It won't be easy that's for sure. I cannot say what the outcome of any claim they make would be as that is impossible to predict and only a judge would be able to decide that but as they are making the claim it is for them to persuade the court they have a valid claim according to the principles set out in my earlier advice.

As your original question has been answered I would be grateful if you could please quickly rate my answer - it only takes a second to do. I can then continue providing further advice and answer follow up questions if needed. Thank you.
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 44941
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
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Customer: replied 3 years ago.

Hi Ben,


 


Thank you for continuing to answer my questions, I have a couple more if you dont mind.


 


In December 2012 my ex-employer confirmed that I was an ex-employee and that as of January 2013 I was classed as self employed and contracting to them, I never received or signed a temporary contract, I believe that he will say that any solicitation of his clients would have happened between January and February 2013, even though this is not true, will this help my case?


 


Regards


 


 


James


 


 

Expert:  Ben Jones replied 3 years ago.
Hello James, yes that can help you - if the restrictions were contained in your employee contract then once your employment in that capacity had ended the restrictions would have ended as well. Whilst you would have had some continued implied duties as a self employed worker they would not have been as strict and obviously not specific as the ones contained in your old employment contract, so enforcing them would be even more difficult
Customer: replied 3 years ago.

Hi Ben,


 


Their has been an interesting development today, my ex-employer has contacted my customers partner, (which provides software for my customers USB device) and told them that in my contract it says that I cant contact any customers or suppliers, which includes them and warned them off speaking to me.


 


My new contract with my new customer involves me talking to this partner on a regular basis, if I cant do that, it could lead to me losing this contract, which is my main income.


 


Can you block a self employed contractor in this way, when my business is to provide consultancy and contracting services?


 


 


Regards


 


 


 


 


James

Expert:  Ben Jones replied 3 years ago.
Hi James

They cannot prevent them speaking to you that's for sure. Whether they can prevent you from speaking to them really depends on what the nature of your contact is, which takes me back to my earlier advice in that it can only be prevented if you are infringing on any of their LBIs
Customer: replied 3 years ago.

Hmm, ok.


 


One thing is for sure, when my employment finished with my-employer in December he was perfectly aware that I would have a contract with his supplier, their wasnt a problem then and subsequently I then worked 2 months as a contractor for my ex-employer, he also encouraged work for me with another one of his suppliers, saying that they should retain my services for one day a week.


 


But now he is referring to an old contract, however I havent told his lawyer yet about being self employed as I am waiting to hear what they are looking for.


 


Thanks once again for answering my questions, you have been a big help.


 


James

Expert:  Ben Jones replied 3 years ago.
My pleasure as always
Customer: replied 3 years ago.

Hi Ben,


 


I hope you are well.


 


I had the letter through from my ex-employers solicitor, it refers to emails that I sent to my client from my own personal email address, sometimes over the weekend, it looks like they have accessed my personal email account to base their case around, they also have just picked out the bits that suited them.


 


What is your view on this?


 


 


Regards


 


 


 


James

Expert:  Ben Jones replied 3 years ago.
Hello James, do you think they are still hacking into your personal account remotely?
Customer: replied 3 years ago.

Hi Ben,


 


I have changed my password today, but they must have been doing this for the last couple of weeks at least once.


 


Of course I have lots of sensitive information there as I use it for business purposes.


 


James

Expert:  Ben Jones replied 3 years ago.
What they have done could be a criminal offence under the Computer Misuse Act. The issue is proving it and also it is unlikely the police will be interested in this. It could still be that all they are doing is blowing a lot of hot air and that they may not actually proceed with this. If they do go ahead and this gets to court, if you can provide evidence that would show they had hacked into your emails then that could really discredit their case
Customer: replied 3 years ago.

Thanks Ben.


 


The emails that they are referring to were only sent from my personal email address, specifically to the people that they say they were sent to in their letter.


 


What is worrying is that this is my main personal email address but I also use it for work purposes, so they would have also has access to confidential client information.

Expert:  Ben Jones replied 3 years ago.
that would likely aggravate matters, the issue again is how do you prove this - that is what will be difficult here
Customer: replied 3 years ago.

I have asked my online email hosting provider to provide a list of IP addresses with a timestamp for the last 6 weeks. As a business my ex-employer has a fixed IP

Expert:  Ben Jones replied 3 years ago.
ok that is unfortunately getting out of my comfort zone as it is a technical issue but if you believe that it will help then it can be useful in the future if the employer was to pursue you for this
Customer: replied 3 years ago.

Thanks Ben, have a good Easter break.


 


Basically the IP address is the computer address that has accessed my account, specifically all computers inside of my ex-employers office will have the same IP address except for the last few digits which will be unique to each computer.


 


So If I receive the list, I will be able to show which have come from inside their organisation and at what time

Expert:  Ben Jones replied 3 years ago.
Ok that would be helpful. As mentioned I do not think the police will be interested in this but certainly some ammunition in case the employer wants to take this further

A very good Easter to you too
Customer: replied 3 years ago.
Hi Ben,

I hope you are well.

I thought you maybe interested in this and I would appreciate your thoughts on it too.

I have just got back from a business trip in the UK meeting our clients, I was shown an email from my clients client, a big partner, which was sent from my ex-employer and it was an email that I had sent from my personal email address to my client, which discussed my clients client, basically if you read what they sent of the email it didn't look good, however they have tampered with it and not sent the whole email thread, if my clients client had read the whole trail he would understand that we had concerns only and they were addressed later in the thread.

Luckily we are close with my clients client that he saw through it, but potentially £1m revenue could be lost.

I am thinking Industrial Espionage here and will contacting the data protection agency tomorrow.

What do you think?


James
Expert:  Ben Jones replied 3 years ago.
Hi, I am sorry but I am currently away and unable to deal with your question. If you need further advice please post this as a new question in our law section and one of my colleagues will be able to assist. Thank you

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