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Thomas Judge
Thomas Judge, Lawyer
Category: Law
Satisfied Customers: 32928
Experience:  Over 25 years experience in law
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I am wanting to setup a business while I am currently

Resolved Question:

Hi,
I am wanting to setup a business while I am currently employed. There is a conflict of interest and would like to know which is the best way to go about this. The idea I had was to register the business in my best friends name and then in a few months when I leave my employment to then sign over the company to my name, would this work?
Submitted: 1 year ago.
Category: Law
Expert:  Thomas Judge replied 1 year ago.
what type of business and do you have a restrictive covenant in your contract
Customer: replied 1 year ago.

I currently work for a media company who produce industry magazines. We do have a website but my work is manly to sell advertising in the print magazine.

My project would be online only. The restriction is to work for a competitor or be working on another job whilst I am here.

Expert:  Thomas Judge replied 1 year ago.
I see. It is not uncommon for employers to try and impose certain restrictions on their employees, under the doctrine of restraint of trade, any contractual term which seeks to restrict an individual's freedom to work for others or carry out his trade or business is illegal and unenforceable. The exception is when the employer can show it has a legitimate business interest that requires protection. This basically means - Legitimate business interests are commonly accepted to include:• Trade secrets and confidential information - this could of course include price sheets• Trade or customer connectionsBut and this is often key an employer cannot impose a restrictive covenant merely to stop someone competing, but it can seek to stop that person using or damaging something which legitimately belongs to it.Non-competition covenants will generally be unenforceable, unless the employer can justify their use. As a matter of general law, once they leave employees are restricted from disclosing confidential information amounting to a trade secret. As with non-solicitation covenants, the restriction must be for a limited time. And will only really be enforceable if by working for a competitor you are infringing on the current employer's LBIs. So that could be for example you using some confidential information or trade secrets in your new job. However, simply working for a competitor without using such information is unlikely to be sufficient to enable the employer to enforce such a restriction. YOu do have to be very careful about any of the scenarios you suggest as if they apply for an injunction to prevent you from working they can seek disclosure of the documents - i.e. when your friend sought to organise the business as such if they are likely in your view to seek an injunction then your plan may not be ideal. The key in many ways is whether you think that they would take action if they find out. Happy to discuss. Please remember to rate positively
Expert:  Thomas Judge replied 1 year ago.
I hope that this helps - please rate positively - thanks
Thomas Judge, Lawyer
Category: Law
Satisfied Customers: 32928
Experience: Over 25 years experience in law
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