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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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Concerning employment contract and restrictive covenants. History:

Customer Question

Concerning employment contract and restrictive covenants.
History: I started working at my current place of employment September 17th 2013. Although issued with a contract initially, it was never signed as i disagreed with one of the restrictive covenant clauses. Although i admittedly did not make this clear to my management, i made no effort to conceal this. The firm never pursued the signed contract past the initial issue.
Now: I have been issued with a new contact due to a company 'reshuffle' and associated updated job title (although i have not been issued with a initial or revised job description). The new contract includes the original contentious clause, i have now brought this to the managements attention, which has been met with an unmoving response.
My Employment/Employer: Senior Designer at a retail design firm with offices in Essex. Eg. Store design, measured surveys, fixture design, visualisation etc. The work is carried out nationwide.
The contentious clause: "You will not for 6 months after the termination of your employment with the company (however caused) either on his/her own account, or in conjunction with, or on behalf of, or as an employee of, any persons, firm or company, whether directly or indirectly, and in connection with the company's business of store planning/design either:-
i. engaged or be concerned or interested in any business which competes in any way whatsoever or which once operational would compete with the company's business in the UK; or
ii. canvass, solicit or endeavour to take away from the company the business of any person, firm or company who was a client of the company during the period of 6 moths immediately preceding the day of such termination; or
iii. endeavour to entice away from the company any person, firm or company who at the date of such termination is or subsequently becomes employed or engaged by the company in any capacity.
iv. the employees obligations in this clause are separate and distinct covenants and the invalidity or un-enforceability of any such covenant will not affect the validity or enforceability of any covenants in favour of the company"
My Understanding;
i. I cannot be employed (within 6 months after dismissal) within the industry/profession which i have developed skills an knowledge within the UK. I cannot work for any other competing firms regardless as to wether the clients are the same, as the firm could been seen to compete for the same potential 'new' work. I cannot work for myself within the same area of expertise as this would be seen as competing.
ii. i cannot make business related contact with any client which had contact with the firm 6 months prior to any termination/dismissal, regardless of whether any work was carried out by the company.
iii. i cannot ask any company employees to work with or for me/another firm, unit 6 moths after the termination/dismissal.
Question: i have no problems with ii. & iii., but i. seems too broad sweeping and unfair. The option of garden leave was put forward by myself as a way to protect the company, and ease any concerns of any possible dismissal for myself, but it was put straight to bed with the promise that it would never be an option for anyone at the firm. My question(s) are, have i understood the full meaning/intent of this restrictive covenant, is it 'reasonable' and is it enforceable?
Many thanks and kind regards,
***** *****
Submitted: 1 year ago.
Category: Law
Expert:  Ben Jones replied 1 year ago.
Hello, my name is ***** ***** it is my pleasure to assist you with your question today. Are you likely to potentially breach this covenant in the future, were you to leave this employer?
Customer: replied 1 year ago.

I can feasible avoid ii. and iii. (although i cannot feasibly stop people approaching me) But i. is unlikely to be avoidable as this is my chosen profession and my current firm deals with a wide range of clients operating not only in the retail, but also commercial sectors of survey and design.

Expert:  Ben Jones replied 1 year ago.
Hello, 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. There are a few different types of restrictive covenants that can be applied, these being:
1. Non-solicitation covenants are there to prevent an employee from enticing away the customers of their ex-employer and as long as they are reasonable are the most commonly enforced type of restriction. Solicitation generally means “directly or indirectly requesting, persuading or encouraging clients of the former employer to transfer their business to their new employer". To be valid, the covenant should be restricted to customers with whom the employee had contact during a specified period before leaving. Other relevant factors may include the employee's level of seniority in the business, the extent of their role in securing new business and the length of similar restrictions in the employment contracts of competitors.
2. Non-dealing covenants 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.
3. 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.
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
Customer: replied 1 year ago.


Thank you for the information, Could you tell me whether i have understood the full meaning/intent of this restrictive covenant, particularly i.? Also, can a be dismissed from the company if i we're not to sign. If not , what position would that leave me legally?

Many thanks for you help,



Expert:  Ben Jones replied 1 year ago.
Hello Steve, you have indeed interpreted this correctly and I would say that clause (i) is too broad as it is rare an employer can stop you from working with ANY business that is in competition with theirs. So this is likely to be unenforceable anyway.
As to terminating your employment if you refused to sign then unfortunately that is a possibility. Until you have 2 years’ continuous service with an employer you are not protected against unfair dismissal so they can dismiss you for more or less any reason, including your refusal to sign the contract. Therefore you are somewhat vulnerable in the first 2 years of your employment. If it appears that they may wish to dismiss for refusing to sign then you may be best advised to sign it and then challenge the enforceability of the clauses as the need arises, knowing that often they are hard to enforce.
If your original question has been answered I would be grateful if you could please quickly rate my answer - it only takes a second to do and is an important part of our process. I can still answer follow up questions afterwards if needed. Thank you
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 44396
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
Ben Jones and 2 other Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you Ben, You have been very helpful. I now feel i have a better understanding to make an informed decision.

Expert:  Ben Jones replied 1 year ago.
You are welcome, all the best

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