Non Competition Clause in my contract

[mcb1975]

I recently left a job as in IT Sales at a firm in London, at a middle to low management level. I have subsequently been offered an interview at a company who operate in the same business area as my old employer. On reviewing my previous work contract, there is a clause which reads as follows

You shall not for the period of twelve (12) months after the termination of your employment either on your own behalf or for any other person directly or indirectly carry on or be engaged (whether as a consultant employee or otherwise) or interested in any business within in the United Kingdom which competes or is proposing to compete with the relevant business of the company or any associated company.

I am concerned this is going to effectively bar me from undertaking a suitable job. Employers look for those with similar backgrounds, ergo these are the kind of environments where my skills will be most valued. Put another way, I am going to struggle to find gainful employment outside of these arenas, which surely makes the clause in itself redundant as such clauses have to be seen to be “reasonable” in law?

 

I am happy to sign any document that states I will not pursue or contact my ex employers clients (not least because it would be a wholly irrelevant facet of this or any future role) but feel the current scenario is rather severe. My ex employer have put their foot down and says they will seek legal action if I undertake such a role.

Given I am currently signing on, and have debts to service, this all seems rather farcical. If it went to court, and the clause was held up, I could easily turn round and file for bankruptcy if I am unable to work.

Anyone have any experience on this?

[elpulpo]

What were the circumstances of you leaving your former job? Did you resign?

 

Certainly, the burden would lie with your former employer to show a court that your obtaining alternative employment within the same sector was in some way to their material detriment.

There is a principal that you have a right to earn a living. Particularly as you are claiming benefit, it would be seen that you have a responsibility to mitigate your circumstances - that is a condition even of your claiming JSA.

Unless you would be going into direct competition with your former employer -stealing clients etc, I wouldn't worry.

[Sidewinder]

These clauses are generally unenforceable unless the former employer can genuinely show that there is a likelihood of a real loss in the event of you working for a competitor. Anything else is a restriction on your freedom of employment. If you are likely to damage something which actually belongs to Employer A (trade secrets, knowledge of future designs etc) , then such a covenant might be deemed lawful, but if all that you have is a knowledge of a customer base, then that is highly unlikely to stick.

 

Restrictive covenants should only be applied on an individual basis according to what each individual employee is privy to, and should not be written in such a way as to be unreasonable. A covenant should not be over-restrictive in terms of how long it remains in force or the area which it covers - in your case, preventing you from working anywhere in the UK for a period of 12 months is totally unreasonable unless you had access to extremely secret information, and in that case they should pay you to agree to the condition (effectively several months paid notice on gardening leave whilst they make your knowledge worthless to others, or a heft pay off to keep your mouth shut!)

 

Depending on what you know, and how small that particular market is, there may or may not be the prospect of real damage to your former employer's business. Probably safest to take a free legal consultation if you can, as although the law says that a restriction can only go so far as is reasonable, somebody has to decide what is reasonable in your particular circumstance, and you may end up with an injunction which you will need legal help to overturn.

[chesham]

These restrictive clauses cannot be applied to the whole of the UK, it has been proven in previous case law that to apply it nationwide is unfair, and puts you at a disadvantage, and therefore is an unfair term. Most tribunals agree on a certain "radius" from your last position to prevent local business from being affected, however they certainly cannot stop you from working for a competitor or another company in the same industry - but they can take action if there is evidence to suggest you used the knowledge and/or client list you had access to in your previous position. How valid their claim would be, and whether or not they would be succesful is another story - not many employers win, even when there is a huge amount of evidence to show the the employee did, in fact, use said knowledge and caused a loss!

 

It's all about precedents and case law, and any legal decision made on this affects future rulings, but I remember at university, this clause came up during a module and was discussed at length, and it is fatally flawed - looks like it offers protection, but in truth, no one ever really does something bad enough to be sued for it.

[Bigredbus]

I recently left a job as in IT Sales at a firm in London, at a middle to low management level. I have subsequently been offered an interview at a company who operate in the same business area as my old employer. On reviewing my previous work contract, there is a clause which reads as follows

 

You shall not for the period of twelve (12) months after the termination of your employment either on your own behalf or for any other person directly or indirectly carry on or be engaged (whether as a consultant employee or otherwise) or interested in any business within in the United Kingdom which competes or is proposing to compete with the relevant business of the company or any associated company.

 

Such restrictive covenant is unenforceable as it would prevent you from obtaining a position within your sector of activity in the all of the UK. This is a very unreasonable RC...

I am concerned this is going to effectively bar me from undertaking a suitable job. Employers look for those with similar backgrounds, ergo these are the kind of environments where my skills will be most valued. Put another way, I am going to struggle to find gainful employment outside of these arenas, which surely makes the clause in itself redundant as such clauses have to be seen to be “reasonable” in law?

 

I am happy to sign any document that states I will not pursue or contact my ex employers clients (not least because it would be a wholly irrelevant facet of this or any future role) but feel the current scenario is rather severe. My ex employer have put their foot down and says they will seek legal action if I undertake such a role.

 

Given I am currently signing on, and have debts to service, this all seems rather farcical. If it went to court, and the clause was held up, I could easily turn round and file for bankruptcy if I am unable to work.

 

Anyone have any experience on this?

 

...

[R&J]

Pretty much what everyone else has said...

 

A restrictive cluase must be reasonable in time and geographical coverage.

 

A 12 month clause covering the whole of the UK is completely unenforcable.

[JonCris]

R&J the clause stating the 'whole' of the UK is to sweeping & I have little doubt that a court would see it as a restriction of trade

[JonCris]

That is of course unless they are going to send on gardening leave on full pay for 1year