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Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. Do you have a contract with the employer that prohibits this?
I did. It contained a 12 month covenant which states I should not contact or deal with clients for 12 months after termination of employment. They did however, say I could work in the same area (financial services) straight away.
ok let me get my response ready please
If the employer applies for and is successful in getting an injunction against you, then that would basically be a formal court order requiring you not to do specific things such as deal with specific clients or restricting the activities you may carry out with them. You can challenge the injunction and basically ‘defend’ what the employer is claiming, hoping that the court either removes the injunction or amends it so that it is not as restrictive. Assuming an injunction still remains in place, you would be bound by its terms and must not do anything which you are prohibited from doing under it. If you were to then disobey the order and do things against the injunction, assuming the injunction had a penal notice, which many do, you could be acting in contempt of court, which is a criminal offence and can result in imprisonment and/or a fine.
This sounds like they would be preventing me from earning an income which I did not think they were aloud to do.
Well not necessarily – they have a right to protect their legitimate business interests and that would include protecting some of the client base. Just because you may not be allowed to work with some of their clients does not mean you are being prevented from earning a living in general – you can still earn a living through other clients, it is just those specific few that may legitimately belong to them and be included in the restriction that may be affected.
The company has pulled out of the county and a lot of the clients do not want to stay with them. Is the company not then putting restrictions on the clients?
Do you know of cases of where a breach of restrictive covenants has been taken to court?
Non-dealing covenants can be legally enforceable but it will of course depend on the circumstances. They 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.
I have seen numerous examples where breaches have been taken to court but it is for the employer to show that the restriction was reasonable and enforceable and that is not always easy
The last letter asks me to sign an undertaking, which I will not do, and they have asked for it to be returned by a certain date stating if not received they 'will consider further steps in relation to injunctive relief/or such other legal action as we may deem necessary'. Do you think I should make contact by the date stated (tomorrow).
Well that is up to you – there is no guarantee that this won’t go further even if you contact them but refuse to sign an undertaking. They may have the attitude that it is all or nothing – you either sign it or they will sue and they may do so if they really wanted to, but it is impossible to predict. No harm in trying to come to an arrangement though
I just want to service the clients that have chosen to come with me and any others that choose to do the same thing. I don't believe a company can properly service a client when the nearest adviser is 3 hours away!
What can they sue for?
Well they can ask for the injunction as mentioned to just try and stop you dealing with them, they could also try to seek compensation for loss of business if it is found that the restriction was unlawfully breached.
Don't they have to prove loss of earnings? For example they would have to prove they clients would have stayed with them.
Yes they do they can’t just claim for it without showing that losses have been incurred but that is all part of their claim and their responsibility if they take it further
Could I just ignore their letter?
yes you can but that may just prompt them to go further, but only time will tell
In your opinion would you recommend I respond?
As mentioned you could try and negotiate with them, that won’t hurt, no one wants to waste time and money in court so that may help but it is up to you.
I guess that's it then. Not entirely sure I'm any way forward but thanks for discussing it with me.
you are welcome