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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46146
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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I have an Non Solicitation clause in my contract of employment

Customer Question

I have an Non Solicitation clause in my contract of employment that seems excessively wide.
The contract has its roots in North America and I would like to get the legality of the contract assessed.
Submitted: 10 months ago.
Category: Law
Expert:  Ben Jones replied 10 months ago.
Hello, my name is***** am a qualified lawyer and it is my pleasure to assist you with your question today.
Expert:  Ben Jones replied 10 months ago.
Please can you provide me with details of the clause
Customer: replied 10 months ago.
The contract is worded as follows
For a period 6 months from the termination of your employment with the corporation however so caused (including without limitation, termination by the corporation in repudiatory breach of contract) (the termination date), solicit or endeavour to entice away from the corporation , lumenpulse inc and each of the subsidiaries of lumenpulse inc (the company) the business or custom of a restricted customer with a view to providing goods or services to the restricted customer in competition with any restricted business, or
- for a period of 6 months from the termination date, be involved with the provision of goods or services to (or otherwise have any business dealings with) any restricted customer in course of any business concern which is in competition with any restricted business, or
- at any time after the Termination date, represent yourself as connected with the company in capacity.The business is Specification Lighting sales.
Products are presented and relationships built with lighting designers with the aim that when they have a use for your company’s product types, they specify the use of them within their lighting designs.
The product sale occurs when the lighting installer purchases from the company, at any point during the specification, tender and through to installation the specification can change, therefore a name in the specification does not guarantee a sale.
As a member of a team I deal with only a small section of customers within the London area, many of which I knew prior to joining the company.
The applications vary immensely from offices to bridges with every application requiring a different mix of products.
Two companies very rarely offer identical ranges of products, where they do offer similar products the products will differ in design and performance.
Expert:  Ben Jones replied 10 months ago.
OK, thank you for your response and for taking the time to provide me with details of the clause. I will review the relevant information and laws and will get back to you as soon as I can. Please do not respond to this message as it will just push your question to the back of the queue and you may experience unnecessary delays. Thank you
Expert:  Ben Jones replied 10 months ago.
Many thanks for your patience. The first thing to note is that 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:{C}· Goodwill (including supplier and customer connections){C}· Trade secrets and confidential information{C}· 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. Whilst at first sight the restrictions look quite common and can be enforceable it would really depend on how widely defined these restricted customers are. If it covers a large business with many different types of work, then that is likely to be too restrictive. If, on the other hand, it covers a specific type of work which you undertake and your influence on these customers for this work is substantial and could affect the ex-employer’s business then they can be seen as reasonable. This is your basic legal position. I have more detailed advice for you in terms of the law on different types of covenants and what the employer can potentially do to enforce them, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, there I no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46146
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
Ben Jones and 3 other Law Specialists are ready to help you
Customer: replied 10 months ago.
Just one other point I forgot to add.
Although I will take my own relationships to a new position, in all probability the other companies that I have been offered positions with, will already have or would have had a relationship with either the the lighting design company in the past or with the Lighting Designer in one of their previous positions in the past.
Every project is different and will involve a wide variety of manufacturers products.
My job will be simply to present a different range of products, some will be similar and many totally different.
Do know if this helps.
Expert:  Ben Jones replied 10 months ago.
If they were already clients of the new employer then there is very little the ex employer can do in the circumstances. They cannot prevent you from working for the new employer just because you will have dealings with these clients in your new job. Restrictions are really there to prevent someone using their influence over clients to try and poach them away from the old employer. Going back to the restrictions, 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:{C}· Obtain an interim injunction preventing the employee from doing certain things that would make them in breach of the restrictive covenant{C}· 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.

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