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Buachaill, Barrister
Category: Law
Satisfied Customers: 10525
Experience:  Barrister 17 years experience
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I have an idea for a technology based business which I've

Resolved Question:

I have an idea for a technology based business which I've planned out and have begun building but I have now been offered a permanent role at another business.
The business that has offered me a role are in the same industry as the industry that I am planning on launching my business in but they are not a direct competitor.
I'm wondering whether if I join this new business I will be able to continue working on my own business idea? Would I be able to keep building my own business and launch it without needing to tell my new employer, or could I risk having legal action taken against me for breach of IP or something?
Could I store a copy of my business plan with a solicitor before I sign a contract with my new employer to prove that the idea and structure of the business was developed before I joined them?
Submitted: 9 months ago.
Category: Law
Expert:  Buachaill replied 9 months ago.

1. Dear Alex, an employee owes an employer a duty of loyalty whilst employed by that employer. This means that the employee must not do anything which will harm the interests of the employer and must act in the interests of the employer whilst employed there. Additionally, be aware that an employer owns any Intellectual Property created by the employee whilst employed by him and which arises from the course of his work. So, you need to be aware of these two principles before you embark upon working for this new employer.

Expert:  Buachaill replied 9 months ago.

2. There is nothing to prevent you starting your business whilst employed by the employer. However, you need to be aware of any restraint of trade clause in your employment contract. Many technology contracts contain restraint of trade clauses which prevent the employee acting in a related business whilst employed by the employer. So check your employment contract before you sign it.

Expert:  Buachaill replied 9 months ago.

3. Be aware that an aspect of the duty of loyalty is that the employee will not compete with the interests of the employer. So, whilst your employer is not a direct competitor of your new business, you need to consider if you are competing with your employer, even tangentially if you set up your business. So avoid competing directly with the employer.

Expert:  Buachaill replied 9 months ago.

4. Keeping a copy of your business plan with a solicitor is a good idea if you don't get sued by your employer for competing with him. However, it is a bad idea if you do get sued for competing as it will show you acted at all times in your own interests and not in the interests of your employer.

Expert:  Buachaill replied 9 months ago.

5. Please Accept or Rate the answer as unless you do so, your Expert will not get paid for answering your question.

Customer: replied 9 months ago.
Hi thanks for your answers.I've not seen my employment contract so will check for a restraint of trade clause but I'm going to assume it does have one. I currently operate and am a director of a limited company as I am a contractor at the moment. If I continued to develop my business idea but did not launch it until I had finished working for my new employer would that put me in breach of a restraint of trade clause?Also, will I need to close down my current limited company in order to work for this other business as an employee or can I remain a director of my limited company?
Expert:  Buachaill replied 9 months ago.

6. You will need to see the actual restraint of Trade clause in order to determine whether your course of conduct falls within its ambit. There is no definite answer to the question whether you did nothing until you left your employer would put you within its ambit. Secondly, you can remain a director of a limited company even if you are working for an employer. There is no conflict so long as you don't compete with your employer.

Customer: replied 9 months ago.
Thank you for your answers, really appreciate it. Final question: if a new business was set up to build out my idea and launch it but I was not a director of that business until after I had left my new employer how would that be viewed?
Expert:  Buachaill replied 9 months ago.

7. Whether you are a director or not is not key to the issue at stake. The issue is whether you infringe your duty of loyalty to an employer by being involved in a rival if not directly competing business. Merely avoiding being a director does not absolve you from your obligations. Being a director might mean you infringe the obligation of loyalty but so too would you if you were a shareholder and not a director.

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