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Ben Jones
Ben Jones, UK Lawyer
Category: Law
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I have a non-compete clause in my contract. I currently work

Resolved Question:

I have a non-compete clause in my contract. I currently work in production for a company who manufacture Specials (custom medicines). I have just accepted a position with a company who are a wholesaler and supply Specials amongst other medical supplies. My new role is completely different and involves the export business for this company, it is a Quality Assurance position and involves no contact with customers. I have no access in my current role to confidential information. Could moving from Specials manufacture to a QA role with a wholesaler be considered as breach on non-compete restrictive covenant?
Submitted: 2 years ago.
Category: Law
Expert:  Ben Jones replied 2 years ago.
Ben Jones : Hello, my name is ***** ***** it is my pleasure to assist you with your question today. How would this move affect your current employers business?
Customer:

I don't believe it would at all. I am a production supervisor

Customer:

I have plenty of time to train someone else as I am working a 3 months notice period.

Ben Jones :

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. So if your employer’s business will not be affected by your move, you will not be using confidential information, client lists, poaching customers or staff then it is highly unlikely such a restriction can be enforced.

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.

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

Customer:

That sounds as though I will be ok. Thank you you very. Much for your help

Ben Jones :

you are welcome, all the best

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