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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 62489
Experience:  Qualified Solicitor
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I would like to set up my own business in my home town in

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I would like to set up my own business in my home town in childcare. However my previous employer had a restrictive covenant put into my contract about working or setting up a business with 5 miles of his. His company have recently changed names and the business is registered under that new name too. I was wondering if there was anyway around this?
Assistant: Have you discussed this with a manager or HR? Or with a lawyer?
Customer: I was the manager there and it’s a small private company with no HR department. No I haven’t discussed it with anyone
Assistant: What is your employment status? Are you an employee, freelancer, consultant or contractor? Do you belong to a union?
Customer: I am unemployed I chose to leave my last employment. I don’t belong to a union I am a nursery nurse looking to start my own nursery.
Assistant: Anything else you want the lawyer to know before I connect you?
Customer: No that’s it thank you

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

What is the exact wording of the clause and also, how long had you worked there and when did you leave?

Customer: replied 4 months ago.
Hi Ben I am sending a screenshot of the clause in the contract now.

OK thanks. How long did you work there and when did you leave please?

Customer: replied 4 months ago.
I left only 2 weeks ago and I worked there for 18months
Customer: replied 4 months ago.
It takes about 3 months for me to set up my business

Thank you. I will get back to you with my answer as soon as I can, which will be at some point today. The system will notify you when this happens. Please do not reply in the meantime as this may unnecessarily delay my response. Many thanks.

Many thanks for your patience. It is a rather common occurrence for employment contracts to contain post-termination restrictive covenants. An employer would understandable want to protect their business from a departing employee's knowledge of confidential information, business connections, influence over clients, suppliers, staff, etc. However, a covenant that restricts an employee's post-termination activities will be automatically unenforceable by 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.

The first thing to consider is what legitimate business interests (LBIs) can the employer try and protect? The most common ones are:

  • Goodwill (trade connections with customers and suppliers)
  • Trade secrets and confidential information
  • Stability of the workforce (preventing poaching of employees)

If they are trying to protect an LBI, any relevant restriction must be drafted no wider than is reasonably necessary to protect that interest. Generally, the courts would try and balance the interests of the employer's business and the employee’s right to freedom of movement and to earn a living.

One thing that immediately stands out in your case is that there is no specific time period for which this restriction applies for. This will almost certainly make it unenforceable because an indefinite restriction will go way beyond what is reasonably required and expected. Had they defined this to apply for a limited period of time, say 3 or 6 months, it could have potentially be applicable but in this case it would be very difficult for them to successfully argue that it is a reasonable and enforceable restriction which they can apply.

That does not mean they won’t give it a go still, but you should maintain that it is an unreasonably and too wide a clause which is not enforceable due to the indefinite duration of the restricted period.

Does this answer your query?

Customer: replied 4 months ago.
thank you very much for your help!

All the best

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