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Ben Jones
Ben Jones, UK Lawyer
Category: Law
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Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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My son is is employed under a contract of employment which

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My son is is employed under a contract of employment which provides that for 12 months he may not…..
carry on or assist with or be employed by.. any activity or business which is the same as or competes with the Restricted Business. Classified as Estate agency or residential property brokerage or residential property portals. The possible new employer has 2 clients in the estate agency line, but is not based on that. Thoughts ?
Submitted: 2 years ago.
Category: Law
Expert:  Jo C. replied 2 years ago.
Hi.
Thank you for your question. My name is ***** ***** I will try to help with this.
Thanks for your interest in me but its not really my area. I will pass you onto somebody who can help.
Customer: replied 2 years ago.

Thanks, ***** ***** wait. In passing, your system is giving me a headache, in that my email address is already registered with you so when I quote it now, you reply that it belongs to another member. Can you pass that to the appropriate person please.

Expert:  Jo C. replied 2 years ago.
Thanks.
I think he is off line but I'm sure he will be back soon.
Customer: replied 2 years ago.

Thanks, ***** *****

Expert:  Ben Jones replied 2 years ago.
Hello, my name is ***** ***** my colleague has asked me to assist with your query as it is more my area of law. If he was to work with a competitor, how would that affect his current employer? Will he be using any confidential information from them, including client lists or connections? Thanks
Customer: replied 2 years ago.

I will answer that more exactly later after speaking again to my son.

Expert:  Ben Jones replied 2 years ago.
ok thank you
Customer: replied 2 years ago.

Hello Ben,

I have spoken to my son. He says he will not be using any confidential information, clients lists or connections of any kind. He will not be working directly with any competitor, merely working on systems that may be provided to a competitor, amongst many other clients.

The new employer does not seem to me to be in competition with the old.

This is an extract of the relevant section of the contract:

16. Post Termination Restrictions 16.1 For a period of twelve months immediately following the Termination Date (less any period applied pursuant to clause 3.4), the Executive shall not, whether by himself or by any servant or agent or otherwise howsoever, and whether on the Executive’s own account or on behalf of or in conjunction with any other person, firm, company or other organisation directly or indirectly: 16.1.1 carry on or assist with, be employed by, be engaged by, hold a position with, be concerned in, interested in or control the carrying on of any activity or business which is the same as or competes with the Restricted Business anywhere in the Restricted Territory, (except as the holder of shares in a company whose shares are listed on a Recognised Investment Exchange which confer not more than 3% in total of the votes which could normally be cast at a general meeting of that company); or 16.1.2 in relation to any business which is the same as or in competition with the Restricted Business conduct any Restricted Services. 16.2 For a period of twelve months immediately following the Termination Date, the Executive shall not, whether by himself or by any servant or agent or otherwise howsoever, and whether on the Executive’s own account or on behalf of or in conjunction with any other person, firm, company or other organisation directly or indirectly offer employment to or employ or offer to or conclude a contract for services with any Restricted Employee or procure or facilitate the making of such an offer. 16.3 The Executive shall not at any time after the Termination Date; 16.3.1 directly or indirectly anywhere in any Restricted Territory carry on a business either alone or jointly with or as officers, manager, agent, consultant or employee of any person whether similar to any part of the business of the Company or any Group Company (as conducted at any time) or otherwise under a title or name comprising or containing the word YOU or any colourable imitation thereof and he will at all times procure that any company controlled by him will not carry out such business under any such title or name; and 16.3.2 say or do anything which is harmful to the reputation or goodwill of the Company or any Group Company or likely to or calculated to lead to any person, firm, company or other organisation to withdraw from or cease to continue to offer a Group Company any rights of purchase, sale, import, distribution or agency and enjoyed by it; 16.3.3 hold himself out falsely as being in anyway connected with any Group Company; and 16.3.4 solicit, entice or procure or endeavour to solicit, entice or procure any employee to breach his contract of employment with the Company or any Group Company or any person to breach his contract for services with the Company or any Group Company. 16.4 The Executive has had an opportunity to consider the restrictions prior to execution of this agreement and agrees that each of the restrictions set out above constitutes an entirely separate, separable and independent covenant and restriction upon him the duration extent and application of each of which is no greater than is reasonably necessary for the protection of good will and the legitimate trade connections of the Restricted Business. 16.5 Further, if a restriction on him contained in this agreement is found void but would be valid if some part of it were deleted, the restrictions shall apply as such deletion as may be necessary to make it valid and effective. 16.6 The Executive recognises that given his role with the Company and within the Group and the Group’s structure the Company has an interest in the business of the other Group Companies which it is legitimate for it to protect it entering into the covenants set out above. 16.7 Notwithstanding and without prejudice to the foregoing of this clause it is acknowledged by the Executive that the Company holds the benefit of these covenants on trust for each Group Company as the Company may direct in substantially the same terms as the covenants the Executive has entered into with the Company. If so requested by the Company, the Executive shall enter into separate contracts with each Group Company. 16.8 The Executive shall show these restrictions to any firm, person, company or other organisation which is the same as or competes with or proposes or is likely to compete with the Restricted Business which offers his employment or a contract for services to him and which he accepts or is minded to accept. “Relevant Period” the period of 12 months immediately preceding and including the earlier of the Termination Date or the date upon which the Executive is placed on garden leave in accordance with clause 3.4; “Restricted Business” Estate agency or residential property brokerage or residential property portals or the development or supply of technology products or services to estate agency businesses or residential property portals; “Restricted Employee” any employee or consultant in a managerial position, any person working in connection with the computer systems of a Group Company or any director of the Company or any Group Company as at the Termination Date and with whom the Executive had personal dealings during the Relevant Period; “Restricted Services” the development, building and/or maintenance of a proprietary technology platform ; “Restricted Territory” The British Isles and Republic of Ireland; “Termination Date” the date of termination of the Appointment; howsoever occurring.

Expert:  Ben Jones replied 2 years ago.
Thanks for getting back to me. Post-termination restrictive covenants are a rather common occurrence in employment relationships. An employer would want to protect their business from a departing employee's knowledge, business connections, influence over remaining staff, etc. However, a covenant that restricts an employee's post-termination activities will be automatically unenforceable for being in restraint of trade, unless the employer can show that it was there to protect a legitimate business interest and did so in a reasonable way.
Legitimate business interests (LBIs) are commonly accepted to include:
• Goodwill (including supplier and customer connections)
• Trade secrets and confidential information
• Stability of the workforce
An employer cannot apply a restrictive covenant just to stop someone competing with their business, but it can seek to stop that person using or damaging their LBIs by using a reasonably drafted covenant.
Non-competition covenants prevent an employee from working with a competing business or setting up to work in competition with their ex-employer. Such general restrictions are seen as a restraint of trade and will be difficult to enforce. They will only be seen as reasonable if in the process of working in competition, the employee uses trade secrets or sensitive confidential information belonging to their ex-employer, or their influence over clients is so great that such a restriction is necessary. The length of the restriction and its geographical coverage will also be relevant.
Whilst restrictive covenants are mainly used as a scare tactic by employers, if an employee has acted in breach of a covenant and the employer is intent on pursuing the matter further they can do so. The following are potential outcomes if the employer takes legal action:
• Obtain an interim injunction preventing the employee from doing certain things that would make them in breach of the restrictive covenant
• Seek compensation for damages that have directly resulted from the breach of the covenants
As you can see there are no hard and fast rules on restrictive covenants. Whether a specific restriction is enforceable will always depend on the individual circumstances, the interest being protected and whether it has been reasonably drafted. The above principles are what the courts will consider when deciding whether a restriction is going to be legally enforceable. It should give you a good idea of what to look for in your situation and decide what the chances of this being pursued further are, although I must say that it is unlikely they will be enforceable in this particular situation.
I hope this has answered your query. Please take a second to leave a positive rating, or if you need me to clarify anything before you go - please get back to me and I will assist further as best as I can. Thank you
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46798
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
Ben Jones and other Law Specialists are ready to help you
Expert:  Ben Jones replied 2 years ago.
Hello, I see you have accessed and read my answer to your query. Please let me know if this has answered your original question or if you need me to clarify anything else for you in relation to this? I just need to know whether to close the question or not? Thanks

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