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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 47411
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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I am currently looking for a new job and my current employer

Customer Question

I am currently looking for a new job and my current employer have a clause/rule whereby I cannot leave my role and work for a rival company or competitor for a 3 month period after my employment is terminated (I.e. I am not allowed to leave John Lewis to work for Currys or similar).
I am trying to understand if this is legal and whether or not my current employer can enforce this should I leave and start work elsewhere?
I have never signed a contract as such, my current employer have a rules of employment booklet which all colleagues must read. Every now and again a point may be added or amended and we are asked to sign each addition or change.
I fear my current employer may suggest (if I decide to leave) that I have signed the entire booklet and will try to enforce this clause preventing me from working for 3 months.
Could you please give some clarification on this matter and where I stand? I currently work in the Retail industry as a Buyer.
Many thanks,
Submitted: 11 months ago.
Category: Law
Expert:  Ben Jones replied 11 months ago.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today. What effects would there be on the current employer if you were to work for a competitor?

Customer: replied 11 months ago.
I am not entirely sure, I believe my current employer would be worried about the, experience and knowledge I have about the company operations and their practices. I think they may be a little bit paranoid that I would divulge this in a new role for a rival company, which isn’t necessarily the case.
Customer: replied 11 months ago.
The clause was added some time ago due to colleagues leaving to work for rival company's which upset the owner. The 3 month period, I believe is supposed to be a "cooling off" period whereby a lot could happen in that time which I would obviously not know about, preventing me from divulging any relevant/current information to a prospective new employer.
Customer: replied 11 months ago.
I can email you the clause copy text used in the booklet if that helps?
Expert:  Ben Jones replied 11 months ago.

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.

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.

This is your basic legal position. I have more detailed advice for you in terms of the options the employer has to try and apply these restricitons, 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 is no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you

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Expert:  Ben Jones replied 11 months ago.

Thank you. 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.

Customer: replied 11 months ago.
Many thanks Ben, just to to summarise so I understand clearly, the clause is not enforceable unless my current employer can prove that by me working for a competitor it could have negative affects on their LBI's?Would the above still apply if I were to work in the same industry but buying different products, IE currently working with TV but working for a rival buying computers or laptops something my current employer doesn't buy or sell?
Expert:  Ben Jones replied 11 months ago.

Yes that is correct. And if you are working in the same industry but with different products then that will work in your favour

Customer: replied 11 months ago.
Excellent, thanks for your advice.
Expert:  Ben Jones replied 11 months ago.

You are welcome, all the best