Restraint of Trade question

[rorksdrift]

Hi Guys,

I work for a small, niche Software Reseller. We sell a specific brand of Microsoft Software and there are only a few other competitors with the same skillset as ours.

However my company is moving in a direction I am not comfortable with and I want to leave. The obvious move is to one of the above mentioned competitors; a couple of whom are fairly local and I believe would be interested in taking me on.

There is though, apparently, a 'restraint of trade' clause in my contract preventing me moving to a direct competitor within 6 months. I say apparently because I can't find my original contract and to ask for it now would I believe reveal my intentions to jump ship.

In reality how enforceable is this clause for an ordinary Joe like me? I work in Sales on a reasonable but not fantastic salary so not exactly a fat cat, so can't imagine a court would make this stick. I have a large mortage and young family to consider.

Any guidance gratefully received.

RD

[Jeanjaquessmoothie]

No clause in any contract can stop you earning a living. No court in the land would agree

EDIT: Interesting article here http://www.independent.org/pdf/tir/t...1_sandefur.pdf

[Weird Al Yankovic]

This would not be a restraint of trade.

It is a restrictive covenant where you are not allowed to work for a competitor or even in the same/similar industry. This clause can stop you earning a living.

They are very popular and very enforcable and a court would very much make this stick-provided it is in your contract of course.

Ignore it and you can be sued by your ex-employer as well as having an injunction against you to work in this industry.

Be very careful.

[patdavies]

On the contrary, it is an unfair contract term and the Courts hate them and will strike them down.

This is why City companies put employees onto paid 'gardening leave' for 3 - 6 months when they are fired/resign - it stops them taking current information to their new employer.

I forget the exact case that set precedent, but I do recall that it involved a hairdresser moving to a competing salon.

[Weird Al Yankovic]

Unfair contract terms in employment contracts have rarely, and only recently, been identified.

To consider a Restrictive Covenant to be an unfair contract term and that it will be struck down is not the case.

The OP has said he works for a small, niche software reseller selling specific Microsoft software.

Each case of Restrictive Covenant needs to be considered on it's scope.

As it is a niche market then the employer needs to protect his business-this would very unlikely be considered unfair due to the circumstance.


From a website for HR managers:



To put this into context, an Employer can potentially protect themselves from an ex-employee misusing confidential information, stealing customers and suppliers or poaching their staff, if they have suitable restrictive covenants in their Employees'' Contracts of Employment. However, in order for a Restrictive Covenant to be valid and enforceable it has to be reasonable in terms of its scope. What is deemed to be reasonable will hinge on the nature of the Employer''s line of business and competition. For instance, it was held in a recent case that a Restrictive Covenant prohibiting a managing director of a firm of insurance brokers from competing with his former Employer for 12 months after the termination of his employment was NOT an unreasonable restraint of trade. However, that case was based on quite specific facts and each Restrictive Covenant needs to be judged in its own context

[Weird Al Yankovic]

Just google 'employment restrictive covenant case law.'

There are thousands that show they are enforceable and always have been.

[rorksdrift]

Many Thanks for your responses to date guys. To pre-empt any move I do make are there legal firms who specialise in this particular area that could clarify the position before I act or maybe even the CAB or other such bodies? Presumably I will need to obtain the Contract to get any further.

Kind regards,

RD

[Weird Al Yankovic]

Any employment lawyer can give you good advice regarding this subject.

A CAB officer may be able to but I'd suggest calling ACAS, they are free and very knowledgable.

You will need your contract for the details of this clause.

A good way to obtain your contract from your employers without arousing suspicion is to say you are taking out an income policy to protect your salary and the provider needs a copy of your contract for admin purposes.

BTW, not sure if it is still the case, but I had a Restrictive Covenant clause in a Royal Mail contract of employment as a postman and there must have been 200,000k of these contracts in operation.

[patdavies]

Having followed the advice to Google, there are only 2 UK relevant links on the first page.

This one seems to sum it all up quite nicely.

[rorksdrift]

Superb spot Pat...a good article which begins to make me feel a bit more bullish over this now.

RD

[rorksdrift]

And thanks Al for the 'applying for Income Protection Cover' idea for the Contract