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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 49820
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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I have been eventually given an employment contract after 9

Customer Question

I have been eventually given an employment contract after 9 months of employment as an estate agents valuer. My employer has put a restrictive covenant saying that I cannot work within a 12 mile radius within 12 months of leaving their employ. I have not signed the agreement as yet as I don't agree with this situation. T he employer has said the contract becomes law in 28 days even if not signed.
Please advise my options
Submitted: 3 years ago.
Category: Employment Law
Expert:  Ben Jones replied 3 years ago.

Ben Jones : Hello, my name is Ben and it is my pleasure to assist you with your question today. Are you simply prohibited from working for a competitor? If you do so how would it affect the employer?
JACUSTOMER-qlgevgh5- : I presume that they would perceive I would gain business for the competitor and not therefore for them as I would not be employed by my current employer.
JACUSTOMER-qlgevgh5- : Also I wish to start my own business as an independent estate agent not be working for others in the area will this be perceived as the same or differently under the restrictive covenant? If the wording is 'working for a competitor not actually being the part ownerof a competitor? If I haven't signed the current agreement do I have options to stop it becoming legally binding?
Ben Jones :

Hello, sorry I was not offline this morning when you replied. There is no law that states after a set period of time the unsigned contract becomes valid anyway. There could be an implied acceptance of the contract, for example if you had not signified your rejection of its terms and simply continued working under the remaining terms., In these circumstances the employer can argue that your acceptance to the contract and its terms was implied.

However, that is unlikely to occur if you had specifically stated that you do not accept the contract, or any specific terms within it – it means you could accept the majority of the terms but specifically refuse to be bound by the restrictions until something has been mutually agreed in that respect.

If that happens then the employer would either have to accept your decision, try to negotiate new terms or seek to terminate your contract (something they can legally do at this stage without you having any comeback).

Even if you agreed to the terms, such restrictions can often be unenforceable due to being too restrictive and unreasonable. Generally, 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:

  • Goodwill (including supplier and customer connections)
  • Trade secrets and confidential information
  • 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:

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.

So if you were simply working for a competitor and not infringing the ex-employer’s LBIs, such as poaching clients, using their confidential information or trade secrets, etc, it is highly unlikely they can enforce such a general and restrictive covenant.

As to the wording you mentioned in the end, that won’t really be relevant – as a part owner you are still going to be undertaking some work for them so the courts would not be looking at the technical meaning of ‘working for’ and whether you are actually an employee, proprietor, partner, etc – your involvement would be sufficient, but it is the reasonableness of such restrictions as mentioned above that would be the most important part.

Ben Jones :

Please let me know if this has answered your original question or if you need me to clarify anything else for you in relation to this? Thanks

Expert:  Ben Jones replied 3 years ago.
Hello, please let me know if I have answered your original question or if you need me to clarify anything else for you in relation to this? Thank you