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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 50158
Experience:  Qualified Employment Solicitor
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My ex-employee is attempting to sue me for breaching the

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My ex-employee is attempting to sue me for breaching the non-compete clause in the contract, because I have joined a company they see as a competitor. I bought into some stock options in my ex-employee, and once they terminated my contract, I requested to sell the shares back to them. They accepted. For nearly 3 months now, I have been chasing a resolution to sell these stocks, and I have finally had to go back into employment. My ex-employee is now saying that because I still have stock options with them, I am in breach of the non-compete clause in the contract. Do they have a case?

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

Please can you kindly confirm, how long ago you left you previous employer? Also, do you have any evidence to support your attempts to resolve the issue surround the sale of your stocks?

Customer: replied 1 year ago.
Hi Ben. My contract was terminated on 25th July 2016. I was given a 4 week notice period. 2 weeks handover, and 2 weeks gardening leave.
Customer: replied 1 year ago.
I have emails of confirmation from the company to say that they are drafting a contract to buy back the shares from me. That was September 25th 2016. I have not heard anything from them since.
Customer: replied 1 year ago.
I have all the emails I sent them and they sent me to try and get these stocks sold quickly. They have dragged it out over the last 3 months.
Customer: replied 1 year ago.
My understanding of the non-compete clause is that a company can not stop me from working in the industry I have all my contacts, skills and trade in. I can not be expected to work in a totally different industry, where I have no experience or skills. This would prevent me from earning a living, and therefore defaulting on all my responsibilities - family, food, bills etc.

OK thank you for your response; please leave it with me. I am in court for the rest of today so will prepare my advice in a while and get back to you at the earliest opportunity. There is no need to wait here as you will receive an email when I have responded. Thank you.

Customer: replied 1 year ago.
Thank you.

No problem at all. I will get back to you at the earliest opportunity. Many thanks

Many thanks for your patience. 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:

· 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.

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.

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

· Seek compensation for damages that have directly resulted from the breach of the covenants

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.

I hope this has answered your query. I would be grateful if you could please take a second to leave a positive rating by selecting 3, 4 or 5 stars - this is an important part of our process and recognises the time I have spent assisting you. If you still need me to clarify anything else, please get back to me on here and I will assist further as best as I can. Thank you

Ben Jones and other Employment Law Specialists are ready to help you
Customer: replied 1 year ago.
Hello Ben,I have now received a letter from my ex-employers solicitors demanding that I resign from my new position, but also surrender my new work contract and other details. Am I obliged to respond to this with all the information they have requested?Many thanks

Hi there, they cannot force you to do anything – neither resign nor forward any of the documents they have requested. They can ask whatever they want but you are not in any way obliged to follow these requests. You can only be forced to resign if for example they obtain a court injunction preventing you from working for that employer, which is very unlikely to happen. The same applies for sending documents – it can only happen once you have been specifically requested to do so by a court order.

Customer: replied 1 year ago.
Thanks for your response Ben.I am surprised that my ex-employer has taken things this far. They are trying to enforce a 6 month restriction in my contract and a 24 month restriction in the share options I opted into.I don't know if they can enforce such restrictive covenants, but they are certainly threatening to do so.
Customer: replied 1 year ago.
Ben,Are you able to tell me whether, from your experience, non-compete restrictive convenants are usually successfully enforced in a court of law purely because they are in the contract?Or does the ex-employer actually have to prove damages or leak of confidential information?I have not breached any of the terms of my employment, other than arguably joining a competitor (who is actually a customer).

Anything is possible but not always that easy. 6 months can just about be reasonable but as mentioned previously it depends on what exactly they are trying to protect with it. You should mot worry too much unless they actually issue formal court proceedings, in which case you should consider speaking to a lawyer in person in case you need formal legal assistance. and no just because a restriction is in a contract does not on its own allw it to be enforced, please check my initial advice for what determines if it is enforceable