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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 70318
Experience:  Qualified Solicitor
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I've got a possible job offer but i's with a competitor i

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hi
JA: Hi. How can I help?
Customer: I've got a possible job offer but i's with a competitor i have a non compete clause in my contract saying I can't work with competitor for 6 months is this really enforceable, what can I do?
JA: Have you discussed the non-compete agreement with a manager or HR? Or with a lawyer?
Customer: no
JA: What is your employment status? Are you an employee, freelancer, consultant or contractor? Do you belong to a union?
Customer: employee
JA: Anything else you want the Lawyer to know before I connect you?
Customer: just this particular part as I really like the new job and it's a real career progress

Hello, I’m Ben. It’s my pleasure to assist you today. I may also ask for some preliminary information to help me determine the legal position.

Hi there. What is the exact wording of the clause; if you can please copy and paste it on here I will take a look? Please also tell me how long you have worked for this employer

Customer: replied 10 days ago.
please
Customer: replied 10 days ago.
can we type first as I'm working at the mo and then if needed further clarification we can do a call
Customer: replied 10 days ago.
please let me know what information do you require

Thank you. Did you receive the query I sent through at all?

What is the exact wording of the clause; if you can please copy and paste it on here I will take a look? Please also tell me how long you have worked for this employer

Customer: replied 10 days ago.
I've worked here for 13-14 months
Customer: replied 10 days ago.
11. Restrictions
11.1 You must not in a Relevant Capacity except with the prior written consent of the Company (save as the beneficial owner of shares or other securities of a body corporate which total no more than 3% of any single class of shares or securities in such body corporate) for the periods set out below after the date of termination of your employment ("Termination Date"), less any period spent on garden leave pursuant to Clause 7.3, do the following:
for 6 months undertake, carry on or be employed, engaged or interested in any capacity in either any business which as at the Termination Date is competitive with a Relevant Business or any business, which as at the Termination Date is reasonably considered to be planning to compete or has taken any active steps to compete with a Relevant Business;
for 6 months entice, induce or encourage a Customer to transfer or remove custom from the Company or any other Group Company;
for 6 months solicit or accept business from or deal with a Customer in connection with the supply of services in competition with the Relevant Business;
for 6 months, be employed or engaged by a Customer in connection with the supply of services in competition with the Relevant Business;
for 6 months, for a business competing with any Relevant Business solicit, interfere with or endeavour to entice away from employment or engagement with the Company or
5
any other Group Company (or procure or assist the solicitation, interference with or enticement of) any Employee, or do any act whereby such Employee is encouraged to terminate their employment or engagement, with the Company or any other Group Company, whether or not such person would by reason of terminating their service with the Company or any other Group Company commit a breach of his contract or employment or engagement;
for 6 months for a business competing with any Relevant Business engage or employ or offer employment to (or procure or assist in the engagement or employment of or in offering employment) to any Employee whether or not such person would by reason of terminating their service with the Company or any other Group Company commit a breach of his contract of employment or engagement;
for 6 months entice, induce or encourage a Supplier to cease supplies to the Company or any Group Company.

OK I understand and thank you for providing this information. Please do not worry and leave it with me for now; 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 understandably 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:

{C}· Goodwill (trade connections with customers and suppliers)

{C}· Trade secrets and confidential information

{C}· 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.

Non-competition covenants like the one you have prevent an employee from working with a competing business or setting up to work in competition with their ex-employer. A covenant simply wishing to prevent competition will not be enforceable. However, a non-competition covenant trying to protect an LBI can be. Such covenants will generally only be 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. If these covenants include a geographical area, their enforceability will also depend on the area they are trying to cover, such as density and population and what is considered reasonable in the circumstances.

Whilst restrictive covenants are often used as a scare tactic by employers, if an employee has allegedly acted in breach of a covenant and the employer wants to take the matter further they can do so. The following legal remedies are available to employers:

{C}· Injunction – this order of the court would seek to stop the employee from doing certain things that would make them in breach of the restrictive covenant, such as not to contact certain clients, not to use certain confidential information or not to work for a specific competitor

{C}· Damages - compensation for loses which have directly resulted from the breach of the covenants, although it would only be possible if such losses are identifiable

In summary, there are various factors which deal with the reasonableness and enforceability of 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. In the end, only a court can decide if a covenant is legally enforceable so unless the employer goes to court and succeeds, they will only be able to rely on the employee’s own compliance with the restrictions. That is when the affected employee has to decide whether to do so or risk the employer taking this further.

Hopefully, I have answered your query in a way that is simple and easy to understand. If anything remains unclear, I will be more than happy to clarify it for you. In the meantime, thank you once again for using our services.

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