How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Ben Jones Your Own Question
Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 48190
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
29905560
Type Your Law Question Here...
Ben Jones is online now

Alex, following up from my last query concerning

Resolved Question:

Hi Alex, following up from my last query concerning non-compete clause, the company told me that they have a director service agreement. I've copied the bit which covers the relevant topic below. Is it enough? Thanks 20. RESTRICTIVECOVENANTS 20.l In order
to protect the Confidential Information and business connections of the Company and each to which he has access as a result of the Appointment, the Employee covenants with the Company that he shall not: (a) for 12 months after Termination solicit or endeavour
to entice away from the Company the business or custom of a Restricted Customer with a view to providing goods or services to that Restricted Customer in competition with any Restricted Business; (b) for 12 months after Termination be involved with the provision
of goods or services to (or otherwise have any business dealings with) any Restricted Customer in the course of any business concern which is in competition with any Restricted Business; (c) for 12 months after Termination solicit or endeavour to entice away
from the Company the business or custom of a Restricted Partner with a view to receiving services from that Restricted Partner in competition with any Restricted Business; (d) for 12 months after Termination be involved with a Restricted Partner with a view
to having business dealings with that Restricted Partner in competition with any Restricted Business; (e) for 12 months after Termination in the course of any business concern which is in competition with any Restricted Business, offer to employ or engage
or otherwise endeavour to entice away from the Company any Restricted Person; (f) for 12 months after Termination in the course of any business concern which is in competition with any Restricted Business,employ or engage or otherwise facilitate the employment
or engagement of any Restricted Person, whether or not such person would be in breach of contract as a result of such employment or engagement; (g) for 12 months after Termination, be involved in any Capacity with any business concern which is (or intends
to be) in competition with any Restricted Business; (h) at any time after Termination, represent himself as connected with the Company in any Capacity, other than as a former employee, or use any registered business names or trading names associated with the
Company.
Submitted: 1 year ago.
Category: Law
Expert:  Ben Jones replied 1 year ago.
Hello, my name is***** am a qualified solicitor and it is my pleasure to assist you with your question today. I have seen the history to your query and the purpose of the restrictions. Whilst it is quite easy for my colleague just to say the wording only needs to say "they will not disclose or use any information gained within the company to set up a rival company directly or indirectly and that they will not set up any business that competes directly or indirectly£, this is a very simplistic approach. The enforcement of restrictive covenants can be quite difficult, because 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. So you need to ensure that any restrictions are properly drafted and reasonable in nature. The wording you have is quite standard but I would go into some more detail than that. I have attached a link to some more robust restrictions, which you can include as necessary. It also includes any definitions at the beginning which are referred to in the restrictions. Carefully check the wording and amend it as necessary to fit within your personal needs. That should give you pretty good bargaining ground to try and restrict the person's future activities. Download link below. Please let me know when downloaded so I can deactivate it. http://www.mediafire.com/view/sb7ya129ms9e5jt/Restrictions.doc I hope this has answered your query. I would be grateful if you could please take a second to leave a positive rating (3, 4 or 5 stars) as that is an important part of our process and recognises the time I have spent assisting you. 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.
thanks for this.just to clarify, do these clauses tie up employees or founders of the business(one is a director another isn't)? the case I'm trying to prevent is that the founders jump ship. There are 2 founders I'm trying to tie up. Is it enough if we include the paragraph you suggested in the Investment agreement. Is it enough if we have it in the director service agreement. Not sure what the difference is. could you shed some light on this please?
Expert:  Ben Jones replied 1 year ago.
You can vary the wording to protect whoever you want, whether it is an employee or a funder, so it is important to define the person in it.
You can have restrictions both in the investment agreement and the service agreement. However, restrictive covenants in the investment agreement are generally more enforceable than those in the service agreement, as the founders are giving the covenants as shareholders (not employees) in part consideration for the investment.
Hope this clarifies?
Expert:  Ben Jones replied 1 year ago.
Hello, I see you have read my response to your query. Please let me know if this has answered your original question or if you need me to clarify anything else for you in relation to this? If your query has been dealt with please take a second to leave a positive rating by selecting 3, 4 or 5 starts from the top of the page. If you need further help please get back to me on here and I will assist as best as I can. Thank you.
Ben Jones and other Law Specialists are ready to help you