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Alice H
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2850
Experience:  Partner in national law firm
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I have a friend who has started a limited company offering

Resolved Question:

I have a friend who has started a limited company offering the same service as the one she is currently working for. In her contract it states that she has to have left the company for a period of 6 months before she can do this. She is currently a healthcare assistant.

Can I pleas ask, where does she stand and what are the penalties she could suffer?

Also, are there penalties the new company could suffer?

Thanks in advance,

Graham
Submitted: 3 years ago.
Category: Law
Expert:  Alice H replied 3 years ago.
My name isXXXXX and I'm happy to help with your question today. I need to ask you some preliminary questions to be able to help you.

Do you mean that she is effectively competing against her current employer?
Customer: replied 3 years ago.

Hi Alex,


 


Thank you for your reply.


 


Yes, she would be I guess. I know she is thinking of leaving as soon as the company is registered to deliver healthcare with the Care Quality Commission.


 


Regards,


 


Graham

Expert:  Alice H replied 3 years ago.
OK.

It is not unusual to find 'restrictive covenants' or 'anti-competition clauses' in employment contracts. The purpose being to stop employees going into business against their employers.

You will have gathered that competing with her employer (by offering the same or similar service for her own benefit) whilst still in their employment is a breach of contract.

The effect of this is that her employer could dismiss her for misconduct, sue her for any losses they have incurred and seek an injunction to stop her competing with them.

This is not a criminal matter so a 'penalty' as such does not apply, but as I mentioned, there could be serious civil consequences for her.

She should either wait until she has left their employment and six months have passed or, if she is leaving soon, she could ask her employer to waive the the restrictive covenant so she does not fall foul of it.

Alex
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