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Ben Jones
Ben Jones, UK Lawyer
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I have an employee contract that i am reviewing for my new

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I have an employee contract that i am reviewing for my new job that i started 3rd October 2016. Its an app development house that is a start up. I have my own Ltd company already set up for my own app ideas. My concern is the following clauses prohibit me from doing my own apps, even worse potentially with Intellectual property law combined with the below, does this mean anything i do work on belongs to the company??? I would really appreciate some initial guidance.
Contract Clauses are:
13. Post Termination Restrictions
13.1 The Employee hereby covenants with the Employer that they will not for the period of 6 months from the date of termination of their employment, without the prior written consent of the Employer, whether on their own account or for any other person, firm or company, directly or indirectly in connection with any business similar to or in competition with the business of the Employer, accept orders from, or have any business dealings with any person, firm or company who or which in the 12 months prior to the end of their employment was a customer or client of the Employer and with whom or which the Employee had personal dealings in the performance of their duties during the last 12 months of their employment.
13.2. The Employee hereby covenants with the Employer that they will not for the period of 6 months from the date of termination of their employment, without the prior written consent of the Employer, whether on their own account or for any other person, firm or company, directly or indirectly in connection with any business similar to or in competition with the business of the Employer solicit or endeavour to entice away from the Employer any person, firm or company who or which in the 12 months prior to the end of their employment was a client or customer of or had a habit of dealing with the Employer and with whom or which the Employee had personal dealings in the performance of their duties during the last 12 months of their employment.
13.3 The Employee hereby covenants with the Employer that they will not for the period of 6 months from the date of termination of their employment, without the prior written consent of the Employer, whether on their own account or for any other person, firm or company, directly or indirectly solicit or entice away from, or endeavour to solicit or entice away from, the Employer any director, manager or salesperson employed by the Employer at the date of termination of the Employee’s employment and with whom the Employee had personal dealings.
13.4 The Employee hereby covenants with the Employer that they will not for the period of 6 months from the date of termination of their employment, without the prior written consent of the Employer, whether on their own account or for any other person, firm or company, employ or otherwise engage in competition with the Employer any person who was during the continuance of their employment with the Employer likely or reasonably likely to be in possession of any confidential information or trade secrets of the Employer or of any client or customer of the Employer.
Submitted: 7 months ago.
Category: Law
Customer: replied 7 months ago.
Further clauses which will be useful are: 13.5. Nothing in these clauses shall prohibit the seeking or procuring of orders or the doing of business not relating or similar to the business or businesses carried on by the Employer.13.6. The Employee hereby acknowledges that:13.6.1 Each of the restrictions above is separate and severable from the others, given for the benefit of the Employer and may be enforced by the Employer;13.6.2 If any restriction is unenforceable for any reason but would be enforceable if some of its wording was deleted, it shall apply with such deletions as may be necessary to make it enforceable.13.6.3 The duration, extent and application of each of the restrictions are considered by the parties to be no greater than is necessary for the protection of the Employer’s interests and reasonable in the circumstances.14. Intellectual Property14.1 Intellectual property means the Employer’s copyright, database right, domain names, registered and unregistered design right, goodwill, know-how, moral rights, patents, registered and unregistered trade mark and all other industrial, commercial and intellectual property rights existing in any jurisdiction and all rights to apply for these.14.2 In accordance with the Patents Act 1977, the Registered Designs Act 1949 and the Copyright, Designs and Patents Act 1988 intellectual property created by the Employee or in the discovery or creation of which the Employee participates and which is capable of being used in or relates to the Employer’s business is the property of the Employer.14.3 If the Employee discovers, creates or becomes aware of any new intellectual property they shall immediately inform the board of the full details and shall on request and at the expense of the Employer give and supply all information, data, drawings and assistance to enable the Employer to exploit the intellectual property to the best advantage. If requested by the Employer at its expense the Employee shall do everything necessary to vest the rights of that Intellectual Property in the Employer (but without receiving payment).14.4 The Employee irrevocably and unconditionally waives all moral rights as defined in the Copyrights, Design and Patents Act 1988 in relation to the intellectual property which is, under the terms of this agreement the property of the Employer.14.5 If the Employee makes or discovers or participates in the making or discovery of any intellectual property during your employment but which is not the property of the Employer shall have the right to acquire the Employee’s rights in the intellectual property within three months after disclosure to the Employer on fair and reasonable terms subject only to the previsions of the Patents Act 1977.
14.6 The Employee irrevocably appoints (and agrees to appoint) the Employer as their legal representative to execute in their name and on their behalf any documents and generally to use their name and act for the purpose of giving the Employer (or its nominee) the full benefit of the title to intellectual property created or discovered by the Employee, or in the creation or discovery of which the Employee participated. A certificate in writing from the Employee or from the Employer’s Secretary that an instrument or act falls within the authority conferred by this clause shall be conclusive evidence that it is the case.14.7 Rights and obligations in respect of intellectual property, which is made or discovered during the Employee’s employment, shall continue in force after the termination of employment for whatever reason.
Customer: replied 7 months ago.
Does this mean that anything i design in my own Company would automatically become the property of my new employer?
Expert:  Ben Jones replied 7 months ago.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

Expert:  Ben Jones replied 7 months ago.

I will take a look and get back to you later this eve thanks

Customer: replied 7 months ago.
Great thank you - if you need the full contract for other clauses i can attach it.
Expert:  Ben Jones replied 7 months ago.

Thanks for your patience. Clause 13 is a restrictive covenant clause. 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. 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.

Clause 14 is the IP clause. It really covers inventions, designs, etc which were created in the course of your employment. It does not mean at any time whilst employed by this company, but whilst you were actually performing the duties of your employment with this company. So no it does not mean that anything you create in your own time belongs to the company – only work you have created whilst working for them, using their time, equipment and resources.

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

Ben Jones, UK Lawyer
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