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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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I have a non-compete with my current employer, and am in discussion

Resolved Question:

I have a non-compete with my current employer, and am in discussion with a new potential employer and one particular issue arises around the scope of the non-compete. The new potential employer's lawyers are interpreting the scope broadly - here is the para -
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“Clients” are defined as organizations to which the Company provides or has provided Consulting Services. Parts of organizations which are both structured as separate units or divisions in fact, and which the general public understands to be such, shall each be considered to be separate organizations.
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The question is whether if I work with a particular client (an individual), the definition would refer to the immediate organisation underneath that client rather than the overall division eg if I work with the Head of a Division, the non-compete would refer to that Division and no broader in the company, or equally if I worked with a team within that Division, the non-compete would refer only to the team.

Also, I am under a performance review due to poor performance last year. Were I to be dismissed, what would typically happen with the non-compete -- would this be held in place?
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you for your question and welcome.

My name is XXXXX XXXXX I will assist you.

If you were dismissed in principle the non compete clause would still be valid.

However the issue you have here is it seems to have no reference to time or limitation. Unless you were in a particularly senior position it maybe that this clause cannot be enforced if it only serves to restrict trade indefinitely.

Do you have any more details concerning the clause?

Kind regards

AJ
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Customer: replied 3 years ago.

Dear AJ -


My question is really around the scope of the non-compete. If I have worked with a particular client (an individual), would the non-compete refer to the immediate organisation underneath that client OR the overall division? For example, if I work with the Head of a Division, would the non-compete refer to that Division and no broader in the company? Or equally if I worked with a team within that Division, would the non-compete would refer only to the team?


 

Expert:  Alex J. replied 3 years ago.
Hi

Thank you.

It would depend whether the division could be easily identified as a seperate organisation. The test they have used is objective in the sense that it is in the eyes of the public is a seperate organisation?

If the answer is yes and it is a separate organisation then other divisions in the organisation won't apply to this particular covenant.

I look forward to hearing from you.

Kind regards

AJ
Customer: replied 3 years ago.

AJ -


 


That is helpful thanks. Is there a common understanding of how a unit or division might be defined, and how 'small' this could be? For example, if I work with a product team, is this product team 'the unit' or is this too small a part of the organisation to be regarded as a unit or division?


 


thank you

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

There is no real common understanding I guess it would more come down to whether the division is recognised as a business of "Going concern" in the eyes of the public and can be readily distinguished.

Kind regards

AJ

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