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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
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My current contract states that I cannot accept order for

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My current contract states that I cannot accept order for similar products or services traded by my current employer if I move position. I have been offered a new position with a company that provides the solution to a service offered by my current employer but my current employer does not actually provide the solution, they are just a route to the solution. Would the law see these as the same? I am in Scotland
Hello, my name is***** am a solicitor on this site and it is my pleasure to assist you with your question today. How would this move affect your current employer?
Customer: replied 2 years ago.

Hi Ben

I currently work for an energy consultancy and part of the service they offer, under the term energy efficiency, is arranging the installation of smart meters and also the installation of new supplies.

The company I am looking to move to provides smart meters and new supply services. Ironically they are the company that my current employer generally uses.

In my view my current employer facilitates these services through other 3rd parties and my new employer fulfills these services and therefore they do not clash, but does the law see it my way?

My current employer principal has been known to be vindictive and I cannot risk ending up without any job.

I can scan in the relevant page, but it is a bit wordy to type in with my 2 finger method Laughing

So do you have any specific influence over these providers, for example if you were to move would your employer lose business because of you going to work elsewhere?
Customer: replied 2 years ago.

Specifically related to the meters and new supplies item I would not expect it to be the case. If I was to end up dealing with any of their existing clients I would expect it to be through them.

On the general question of "would they lose business if I moved elsewhere" then it is possible as, in my opinion, they would not have the resources to manage the clients that I did and therefore some may not renew contracts in the future through the level of service dropping, but this is obviosuly subjective.

The offer of employement letter from my new supplier specifically states "you are able to accept this job and carry out the work that it would invlove without breaching any legal restrictions on your activities, such as restrictions imposed by a current employer", so you can see my concern over the issue.

P.S. sorry just realised how rude I have been, my name is Phil

No problem Phil, nice to meet you. It looks like this is a non-compete restriction which is certainly not uncommon in employment contracts. Generally, aAn 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:· 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, and the one you have could come under some of these, such as: 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. 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:· 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 So 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. So you will never be able to get someone to guarantee that a restriction is not going to pose issues in the future – only a court can decide that but it depends on the ex-employer pursuing that in the first place and building a good case, convincing a court it was a reasonably drafted restriction. The more you can separate yourself from the restriction or show that you do not have a major influence on the business being enticed away from them the better for you. I trust this has answered your query. I would be grateful if you could please take a second to leave a positive rating (selecting 3, 4 or 5 starts at the top of the page). If for any reason you are unhappy with my response or 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
Customer: replied 2 years ago.

Thanks Ben,

Can I ask one last piece of advice on this.

I have not raised these terms with either the new employer or the recruitment agency that I went through.

My main concern is entering into employement with the new company and this becomes an issue thus losing me the job.

Do you think I should discuss it with them to be safe?

The current employer cannot just prevent you from working for the new one – they cannot enforce the contract against them and state that by hiring you they are in breach of contract. The contract is just between you and the current employer so any potential breach is between you and them. So they could potentially get an injunction to stop you working there but this is a long shot. I would probably suggest you discuss this with the new employer just so they know where you both stand and that there is a potential restriction and to avoid any nasty surprises in the future. The more they know now the better for all concerned
Customer: replied 2 years ago.

Thanks Ben

Have a good evening.



You are most welcome, all the best
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