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Hello, my name is ***** ***** it is my pleasure to assist you with your question today. What has the advice been so far from the organisations you have approached?
The advice was :
a) The contracts state that the individuals were self-employed – it is much harder to convince a court that it is reasonable to restrict the activities of a self-employed consultant as opposed to an employee after the engagement has terminated
b) The restriction in the “Cleaner Agreement” is not limited in duration or scope and is likely to be considered too wide to be enforceable
c) The relevant restrictions in the “Confidentiality Agreement” that Natalia signed have a duration of five years which a court is almost certain to consider unreasonable and therefore unenforceable. To give you an idea, the maximum period of restriction that a court is likely to enforce is 12 months.
The advice you have received is largely correct. Whilst employers have the legal right to try and protect their business and legitimate business interests such as client base, reputation or protected themselves from competition, the restrictions in the contracts must be reasonable.
If you have a restriction with no specified time limit or geographical scope then it is highly likely that it will be considered unenforceable because it would be too wide and unreasonable. Similarly, a restriction of 5 years is very rarely going to be seen as reasonable, especially for someone who works as a cleaner (maybe top-end executives could just about get away with it in very specific circumstances but a cleaner is highly unlikely to be bound by a 5-year restrictive covenant). A cleaner may be restricted for 3, 6 or at a push 12 months but this should be specified in the contract and be drafted in such a way that a court would consider it fair and reasonable in the circumstances.
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:
Both would need to go through court and whilst there is nothing stopping you from taking this to court be aware that the claim could easily be rejected if the court finds the restrictions too wide or unreasonable. It could appear unfair to you but it is how the law operates and it should serve as a warning on how future contracts should be drafted.
I hope this clarifies your position? If you could please quickly let me know that would be great, as it is important for us to keep track of customer satisfaction. Thank you
Thanks Ben, We still think we have a change as we are singing 3 years contracts with our clients, therefore we have 5 years non-competition clause.
Also she has done it in her notice period. would it help to court to find it more reasonable?
you are very unlikely to argue that a 5 year restrictive period is reasonable for a cleaner, even if your contracts are for 3 years - I would advise against trying to use such long periods. Whether she did this in the notice period or not is not an issue - it makes no difference in the circumstances - the key is still the actual restriction wording and how reasonable the court finds it in general, not whether it was breached in the notice period
Does this clarify things a bit more for you?