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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 50161
Experience:  Qualified Solicitor
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I have a restrictive covenant that says I am not allowed to

Customer Question

I have a restrictive covenant that says I am not allowed to make contact with my employers clients for 6 months after I leave, if I show you the form can I ask what the implications were if I did
Submitted: 2 years ago.
Category: Law
Expert:  Ben Jones replied 2 years ago.
Hello, my name is***** am a solicitor on this site and it is my pleasure to assist you with your question today. Are you able to attach the document on here please so I can take a look?
Customer: replied 2 years ago.

Hi can this not be published online as it gas my signature on it

Expert:  Ben Jones replied 2 years ago.
I will lock the question for privacy as soon as we have finished and you are satisfied. Going back to your query, 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-solicitation covenants, such as the one here, 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. 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 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 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.

Hi, thank you for your response. I would like to know if I make contact with my previous employers clients, and they decide to move away to my company based on the covenant what would the chances that my previous company be able to claim any damages from my company be?

Expert:  Ben Jones replied 2 years ago.
It is always rather difficult to predict the outcome of such claims. It is not just about what is in the contract. The outcome depends On many other factors like evidence, how the parties come across, how the judge views it and also your luck on the day. There is no exact science to it so to predict the chances of success is impossible. But it is clear that there is a restriction prohibiting you from canvassing customers so if at all possible you should let them contact you first as that would reduce the risks. Does this clarify things for you a bit more?
Customer: replied 2 years ago.

Thank you again for your response, just to make things clear would the attach covenant be encforacble or is it only a deterrent in the hopes someone won't do it

Expert:  Ben Jones replied 2 years ago.
Mainly they are used as a deterrent, in the hope that most employees would see these and try not to breach them so that they do not potentially get into trouble. It is quite different if they are challenged in court, they would get scrutinised a lot more. Whilst there is never a guarantee that a restriction would be found unenforceable, as you can see from my main response the task of proving a restriction is reasonable and enforceable is quite difficult so unless there is a clear breach of LBIs, it can be an uphill task for employers. Hope this clarifies a bit more for you?
Expert:  Ben Jones replied 2 years ago.
Hello, I see you have read my response to your query. 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? If your query has been dealt with please take a second to leave a positive rating by selecting 3, 4 or 5 starts from the top of the page. If you need further help please get back to me on here and I will assist as best as I can. Thank you.