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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 61762
Experience:  Qualified Employment Solicitor
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I have recently been sent a letter from a solicitor notifying

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I have recently been sent a letter from a solicitor notifying me that my ex employer is suing me for breach of contract. It would be easiest if I could attach, or send you a copy of the letter I received as it also highlights the offending sections of my old contract. The basic jist is that I left to join a competitor within 4 months of leaving my old job (which is not allowed according to their contract). They have demanded that I cease all activity with immediate effect and have told me I have to reply to them with my new contract and details of all monies received/due to me by 12 noon tomorrow (I got the letter last Thurs and with BH weekend haven't had time to do anything).

I fully acknowledge signing the contract however I am qualified and trained to work in my current role and so they are effectively preventing me from making a living. For information my current and previous roles were both as private medical insurance adviser. They are also suggesting that I mislead as to my intentions as I stated I was relocating and looking for work more locally (which is true..I did relocate and the commute is half the distance).

I'm not sure it's relevant but I had the worst year of my life last year and without going into too much detail, it affected my health and resulted in me having an extended period of time away from work. In fact I was signed off (all of this would be supported by my medical records) from the mid/end of November 2012 until returning to work in a reduced capacity (part time and not doing my usual day job, ie not selling) for just 2 weeks late Feb/Early March, before being signed off by my Dr again. During this period of time I found my current job and so resigned (my resignation was accepted with immediate effect due the circumstances).

A number of people have said that it's not enforceable and that it's just scare tactics, however as none of them are legal experts I remain unconvinced. I need to know whether they can force me to resign, whether I actually need to send them the information they have demanded and how I need to respond to them (they have made the deadline unreasonably short). I appreciate you may not be able to answer this categorically without seeing my old contract. I don't have a digital copy, or the original for that matter as I think I disposed of it when I relocated. I have emailed the old HR dept asking them to send me a copy though. I do have the solicitors letter though which I would be more than happy to send if it helps.

The irony is that my life fell apart completely last year and I have only just started making progress. I don't enjoy my current job but am working hard to put myself through a course to change career and do something I love, they seem hell bend on ruining this for me too. Please, please help. I'm not financially in a position to defend myself due to financial hardship as a result of last years events.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. How is your employer's business affected because of this?

Customer:

Well both employers are Private Medical Insurance brokers. To answer your question though, I'm not sure that it is. The are claiming that I mislead them as to my intentions and therefore would assume that I have disclosed trade secrets or client details, which I haven't and they couldn't prove otherwise. The lead sources are different too. My new company uses only comparison sites such as compare the market for their customers, whereas my previous employer buy their leads.

Customer:

There are 2 main points in summary at the end of their letter. Would you like me to type those out, or can I send you the letter?

Ben Jones :

You may try and attach it using the paperclip icon on the formatting toolbar

Customer:

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Customer:

Did that work? I think I need to do it for each page. I'll send the others now.

Ben Jones :

yes got the first one thanks

Customer:

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Customer:

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Customer:

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Customer:

That's all 4 pages now Ben, hopefully that helps?

Ben Jones :

thanks, XXXXX XXXXX review these and get back to you shortly

Customer:

Thank you

Ben Jones :

It is common for employers to want to protect their business interests from unfair competition by current and ex-employees. This applies especially to employees who have knowledge of sensitive and valuable information, have considerable influence over the workforce or have strong customer connections. However, at the same time it is in the public interest to ensure that employees are free to move between employers and use their skills, knowledge and experience in a new setting.


 


Whilst employers try and impose certain restrictions on their employees, under the doctrine of restraint of trade, any contractual term which seeks to restrict an individual's freedom to work for others or carry out his trade or business is illegal and unenforceable. The exception is when the employer can show it has a legitimate business interest that requires protection.


 


Legitimate business interests (LBIs) are commonly accepted to include:



  • Trade secrets and confidential information

  • Trade or customer connections

  • Stability of the workforce


 


An employer cannot impose a restrictive covenant merely to stop someone competing, but it can seek to stop that person using or damaging something which legitimately belongs to it, such as an LBI.


 


The most common restrictions are:


 



  1. Non-solicitation covenants - preventing an employee from contacting the customers of their ex-employer. Recent case law has suggested that solicitation means “directly or indirectly requesting, persuading or encouraging clients of the former employer to transfer their business to their new employer". This 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, the length of similar restrictions in the employment contracts of competitors. Generally, restrictions against potential customers will be harder to enforce.

  2. Non-dealing covenants – this is a more general restriction and not only restricts solicitation but any other general contact with them, even if they are the ones that have approached the employee in the first place. The enforceability of a non-dealing covenant will depend on the interest being protected. Similar considerations as for the enforcement of non-solicitation covenants will generally apply, although the much wider scope of such covenants will make them harder to enforce.

  3. Non-competition covenants – these will generally be unenforceable, unless the employer can justify their use. As a matter of general law, once they leave employees are restricted from disclosing confidential information amounting to a trade secret. As with non-solicitation covenants, the restriction must be for a limited time. The geographical extent of the limitation must also be considered. Worldwide covenants have been held to be enforceable, but more specific restrictions can be enforceable if considered reasonable in the circumstances.


 


There are a couple of options open to employers when trying to enforce restrictive covenants:



  • Obtain an interim injunction - this will result in a court issuing an injunction stopping the employee from doing certain things, such as dealing with specific clients

  • Seek compensation for damages that have resulted from the breach of the covenant(s)


 


So you cannot be prevented from working for a competitor simply because they are such - you can only realistically be prevented if you are infringing on any LBIs. Also if the employer is trying to sue you for this it would be for them to prove that you have breached these LBIs and that their claim should succeed.


 


Finally, you do not have to forward any of your contract or documents from the new employer and certainly not send over any money received from that job, in fact this last part is quite ridiculous.


 

Customer:

Thank you Ben for your reply. Ok, so I have not contacted any of my old clients, nor have I encouraged anyone to move across to my new employer. The old employer could not prove that I have taken any business from them, they could produce a list of every client I sold to and none of those would match who I've sold to at my new employer. I'm not sure what they would be claiming damages for? I was partial to sensitive information in as much as I used their systems and I had to deal with data protection due to holding client details, but none of that was ever taken out of the office.

Customer:

Could you please advise how you would recommend I reply to their email tomorrow and what the likely next step of my ex employer would be?

Customer:

Oh and for the record the position I held with the company was not one of any influence or privy to any sensitive information above and beyond the call of my duty. It was not a position of any level of authority.

Ben Jones :

Try to respond to each of their claims one by one and use my above response to help you. Whilst the employer can continue sending you threatening letters via their solicitor, if they want to take this further properly they will have to go to court to try and get an injunction or seek damages. It would then be for them to prove that they have grounds to pursue either of these

Customer:

Ben, you are so much more eloquent with your words and understanding than I am. Would you be kind enough to help me draft a response to their email that I can send tomorrow please? I am a little nervous that they will tie me up in knots as soon as they throw legal speak at me.

Ben Jones :

Unfortunately drafting is not part of our service, we are just a Q&A site on legal matters, and to be honest you are not expected to come up with any legal speak or similar, you just to clearly state your position. To be honest you may even chose to ignore their letter and not respond as there is no legal obligation on you to do so, but it would be better just to get back to them with something plainly stating that you have no case to answer

Customer:

Ok understood. So just to be clear they cannot make me resign from my current position and they the non compete clause is unenforceable unless they can prove that I have breached any of the LBI's?

Ben Jones :

no they certainly cannot force you to resign, the best they can do is to get an injunction preventing you from working for that employer but that will only occur after a court claim and if they can show that you have indeed breached the terms, which would need to be justified as being reasonable in the first place, which they will likely struggle with

Customer:

So if I reply to their email and use some of the points you have mentioned above to defend myself, I shouldn't have to do any more? Surely my ex employer and their solicitors would know that they stand little chance of winning if it goes to court? From your experience, does this just look like scare tactics?

Ben Jones :

yes certainly, a solicitor would act on their client's instructions and even if there is something to go by, however small, they could still go ahead and make threats based on that. They have a contract here with these restrictions so they can use that to issue all sorts of threats, the key however is whether they are reasonable and binding in the first place and that is unlikely

Customer:

Ok thank you. So it sounds as if it is unlikely my ex employer would pursue this much further even if they are threatening to do so as the likelihood of any of it standing up in court is slim? Should I ask them to quantify their threats for damages and tell them to prove to me they have a claim? If they did pursue further and it went to court, what should I do then? Would I need legal representation or is it likely the court would throw it out?

Ben Jones :

well there is nothing stopping them from taking it further but it would be a long shot. There is no need to get into further correspondence with them by asking them to prove their claims, just dispute what they have claimed and leave it at that. if it goes to court you would not need legal representation although it can help. You can ask for the court to throw out the claim because it would not have reasonable prospects of success but that is a matter for another day so for the time being just concentrate on your response to their letter

Customer:

Ok thank you Ben, I know you don't offer drafting and have answered enough of my questions already. I will rate you now, but if I write the email now would you perhaps give it the once over before I sent it? I'm sorry, I've never been in this position before and it's rather intimidating to say the least

Ben Jones :

yes I can certainly do that

Customer:

Also is it possible to send an email transcript... I have a tiny window above that shows very little of our conversation. Thank you, XXXXX XXXXX rate you does it close our conversation or can I still contact you?

Ben Jones :

No if you rate it will not delete this and you can still access it in your account. n fact once you do this it should change the view to a full page where you can view the answer easier

Ben Jones and 3 other Employment Law Specialists are ready to help you
Customer: replied 6 years ago.


Dear Ben could you give this the once over for me please?


 


Dear Sir,


 


I am replying to your letter dated 22/05/2013, with regards to your client USAY Compare.



In response to your 2 claims of breach of contract;


 


1 - Whilst I understand it is common for employers to want to protect their business interests from unfair competition by current and ex-employees, I understand that at the same time it is in the public interest to ensure that employees are free to move between employers and use their skills, knowledge and experience in a new setting.



Whilst employers try and impose certain restrictions on their employees, under the doctrine of restraint of trade, any contractual term which seeks to restrict an individual's freedom to work for others or carry out his trade or business is illegal and unenforceable. The exception is when the employer can show it has a legitimate business interest that requires protection, however as detailed above I refute this claim.



2 - Firstly I have never tried to mislead anyone with regards to my intentions. I did relocate to Worcester as should be obvious from my postal address. I also stated I was looking for work more locally, which I did. Cheltenham to Worcester is half the distance of Cirencester to Worcester. Also, if I was trying to mislead USAY I would not have given my current employer authorisation to obtain a reference. I would also like to point out that at USAY I was not privy to any "trade secrets" and did not hold any position of authority or influence. I merely had access to the information to necessitate my daily duties. I have not and would ever partake in activities that were dishonest or harmful towards any individual or company. I have not contacted or encouraged any of the previous clients I sold to at USAY to move with me to my new company.


 


I believe that I am entitled to use my skills, knowledge and experience to earn a living and no employer can lawfully prevent me from doing this.


 


I trust this will be the last of the matter.


 


Kind regards,


 


Scott Williams.

Hi, just a few changes:

Dear Sir,



I am replying to your letter dated 22/05/2013, with regards to your client USAY Compare.


In response to your 2 claims of breach of contract;



1 - Whilst I understand it is common for employers to want to protect their business interests from unfair competition by current and ex-employees, at the same time it is in the public interest to ensure that employees are free to move between employers and use their skills, knowledge and experience in a new setting.

Whilst employers try and impose certain restrictions on their employees, under the doctrine of restraint of trade, any contractual term which seeks to restrict an individual's freedom to work for others or carry out his trade or business is illegal and unenforceable. The exception is when the employer can show it has a legitimate business interest that requires protection, however it is clear that no such breach has occurred here and in the absence of any evidence no court would rule that such a restriction was reasonable or enforceable.

2 - It is unreasonable to assume that just because my plans have changed that I have accessed or will disclose any confidential information from my previous employment. I would also like to point out that at USAY I was not privy to any "trade secrets" and did not hold any position of authority or influence. I merely had access to the information to necessitate my daily duties. I have not and would never partake in activities that were dishonest or harmful towards any individual or company. I have not contacted or encouraged any of the previous clients I sold to at USAY to move with me to my new company and as such I am not in breach of any of the restrictions in my contract of employment. Finally, there is no evidence of any alleged breach that would entitle a court of law to take any decision in favour of your client.

I am entitled to use my skills, knowledge and experience to earn a living and no employer can lawfully prevent me from doing this.

I trust this will be the end of this matter.



Kind regards,



Scott Williams.
Customer: replied 6 years ago.


Thank you Ben. I am very grateful for your advice. I will be in touch if I require further help.

My pleasure, all the best for now
Customer: replied 6 years ago.


Dear Ben, I have today received an email from them telling me it is reasonable for their client to expect me to comply with their restrictive covenents and that they believe I mislead them on 2 counts. 1 with regards to my intentions in my resignation email where I stated I was relocating to Worcester and looking for work more locally and 2 because my new employer sent a reference request on paper heading A Plan (parent company that don't deal in their field) when I'm actually working for PMI Partners (a direct competitor). To be honest it seems like they are clutching at straws but it still concerns me as I don't know if they can take this further where I wont be able to defend myself? They want me to respond by Monday. I don't know whether to ignore it or write them again suggesting they reread my email as they seem to have overlooked all of the relevant bits?

Hello, whilst their client may expect you to comply with their restrictive covenants it does not mean that the law would view this in the same way and agree with their interpretation. What they believe is irrelevant, there are legal principles that apply here, which I discussed previously, which would decide whether these covenants are enforceable or not.

The reasons you stated for leaving are, to be hones, irrelevant., I do not see what relevance any of this has on the enforceability of the covenants and you do not have to count yourself accountable for what you told them and what you actually did.

You may wish to send them a final letter refuting their allegations and inform them that if the contents of any future correspondence remains the same you will not be responding as you have already addressed the issues they have raised.