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Ben Jones
Ben Jones, UK Lawyer
Category: Law
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I've moved companies a few times over the years, and

Resolved Question:

Hi,
I've moved companies a few times over the years, and while non-compete clauses have been in affect, it's never been something that's actually caused an issue when moving companies.
However, on my latest move, my current employer is trying to state that while I need to work my 1 month notice (totally fair enough), that I cant start work for the new firm for one additional month. However, they are stating that I won't be paid for this month!
While both companies are in the automotive market research field, my current business focuses purely on aftermarket research, while the new one does not touch this field at all. Also, I struggle to see, other than just to be vindictive towards me, how this additional month would make any difference.
Keen to understand if there is any legal standpoint either way for this?
In the mean time I've also informed my new employer of this, as I wanted to ensure they are in the loop asap.
Kind regards,
Jack
Submitted: 1 year ago.
Category: Law
Expert:  Ben Jones replied 1 year ago.
Hello, my name is***** am a solicitor on this site and it is my pleasure to assist you with your question today. Is there a specific contractual restriction which states they can do that?
Customer: replied 1 year ago.
Hi Ben,I've attached a copy of my current contract.
Expert:  Ben Jones replied 1 year ago.
Thanks I will review and get back to you
Customer: replied 1 year ago.
Cheers Ben,Much appreciated!
Expert:  Ben Jones replied 1 year ago.
No problem
Expert:  Ben Jones replied 1 year ago.
Many thanks for your patience. Having looked at your contract thee is a restrictive covenant clause in there (Clause 15) which deals with this situation. It prevents you from working for a Competing Business amongst other restrictions, although the relevant clause in this case is in relation to the Competing Business definition. This term is defined as a business which engages to a material extent in the same business activities as your employer or any of its group companies and these activities must be the ones you have done within the last 12 months.
If this restriction is relevant and is considered reasonable then the employer could try and enforce it and you would not be paid for this month where you are restricted. However if there is no competition between the businesses and the scope of their work is different, even if they are in the same field, then it is unlikely that the restriction can be considered reasonable or enforceable.
In general, 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.
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. In this case that may be difficult for the employer.
I trust this has answered your query. I would be grateful if you could please take a second to leave a positive rating (selecting 3, 4 or 5 starts at the top of the page). If for any reason you are unhappy with my response or if you need me to clarify anything before you go - please get back to me on here and I will assist further as best as I can. Thank you
Customer: replied 1 year ago.
Hi Ben,Thank you for your help here.So just to confirm, my current business specialises in aftermarket automotive consumer research, whereas the new business does not touch that market segment at all.As such, I wouldn't have any involvement with the current contacts from my present position / be ripping any clients or utilising any proprietary information from GiPA as I none of it is relevant to my new role.Would you say on that basis that such a thing would be hard for my current employer to enforce?Kind regards,Jack
Expert:  Ben Jones replied 1 year ago.
Hell Jack yes I would say so, for such restrictions to be enforceable your employer's business would really have to be affected adversely in some at through you leaving and in the circumstances that looks unlikely. Hope this clarifies?
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46182
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
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