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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3840
Experience:  Solicitors 2 years plus PQE
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I work in the performing arts industry for a few employers.

Customer Question

I work in the performing arts industry for a few employers. I am setting up my own business and one of the employers that I contract for is threatening to sue me due to a restrictive covenant I have in a contract I signed 6 years ago. I have worked on and off for that employer with a 3 year gap since my first stint. I have not re-signed any contract in the last 6 years. They say I cannot work in the industry for 12 months after leaving them. This seems quite extreme due to the nature of the employment and the wide variety of services that can be offered within the industry. It just feels like a vindictive move rather than reacting to any real impact on their business. Personalities seem to be at play here rather than any rational thought about the situation. Is 12 months realistic? Can they be so restrictive in their assertion that I cannot work in the industry at all? Their business is fairly transparent so I'm not sure what proprietary knowledge they think I have compared to someone who just goes on their website. I am highly qualified and have gained experience in many other places so not sure what IP they have invested in me. Any pointers would be greatly appreciated.
Submitted: 4 years ago.
Category: Law
Expert:  Alex J. replied 4 years ago.

Thank you for your question and welcome.

My name is AJ and I will assist you.

Can you tell me the wording of the restrictive covenant?

Was your role particularly senior or did you have access to any commercially sensitive information from this employer? Were you actually an employee or a consultant?

Kind regards

Customer: replied 4 years ago.

I don't have a copy of the contract. I have asked them for a copy but they are delaying giving it to me and have asked for me to sign a new contract next week. This makes me think they are not confident in the current terms of the contract and are trying to lock me in again.

I am a teacher that runs some drama courses and puts on performances periodically. I do not have anything to do with the commercial side of the business although I will work with technicians and vendors to help put on some of the performances so I will have some knowledge of costs. The fees charged to students are widely known from the company website. The business I work for is a national franchise and the issue I have is with the local franchise principal.

Expert:  Alex J. replied 4 years ago.

Thank you for your response.

I will need to review the restrictive covenant to be certain however I can provide you with the following information about a restrictive covenants:
- Generally restrictive covenants can only be on commercially reasonable terms and to protect a legitimate interest. Generally it is against EU law and public policy to restrict free competition and order to have an enforceable restrictive covenant and it cannot be too wide or too long;
- The longest you would expect a covenant to last would 24 months and in some exceptional circumstances 5 years - these are the upper limits of the covenants and can only be used where you have very senior employees or consultants who are so fundamental to a business or have access to such sensitive information they need to have a restriction for that long.
- For an employee that is not so senior at most you would expect the restrictions to last 6 months, but they should not serve to stop some one from working. A reasonable restriction would stop someone from say approaching clients or poaching key staff.

A clause that restricts someones ability to work for almost a year is not serving any commercial purpose or interest especially where the employee concerned is not at a very senior level.

Were you paid extra in recognition of these covenants?

I look forward to hearing from you.

Kind regards