Conflict of interest. Wife needs to work for competitor / go self employed.

[david2000]

Hi, I am an electroncs engineer living in the UK and have worked for a UK electronics repair and sales company for about 5 years.

 

My wife recently gave birth to our first child and has just come off maternity allowance, so she needs to start bringing some money in.

 

The problem we have is that she is also an engineer and is considering either, starting work with a direct competitor to my employer, with our baby going into childcare, or going self-employed selling the same products as my employer via a website.

 

The questions is, by law, can my employer do anything about it; like for instance, sack me over conflict of interest?

 

Surely the law must be able to over-ride a companies contract, where the spouses best way of earning a living is the career she has been trained for and is qualified in, even if it is the same as her partners?

 

This company I work for has recently been bought out by an american firm in the same service sector, and has issued new employment contracts. I have scanned the section of my contract that is bothering me. (Below)

 

Also, about 3 years ago, my wife used to work for the company I work for before it got bought by the (current) american one, but does not wish to go back there. She left on good terms.

 

Thanks for any help

[san_d]

In my opinion it would definitely be a conflict of interest. The question is how enforceable it is. In one of my previous jobs I had a clause that stated I couldn't work for any competitor for the next 2 years, or they would fine me £3000 per day.

 

Bear in mind that in the field of electronics there could be patents and trade secrets involved.

[becky2585]

I do understand your problem here. Is strict confidential information or trade secrets involved? Patents and intellectual property?

 

They would still struggle to dismiss you, but as its a possibility, why don't you ask your HR Department in writing what their view is? That way you know where you stand.

[Emmzzi]

'Her' business has a greater chance of being seen as 'our' business than working for someone else. Would be much easier if she would work for your employer though!

[steampowered]

I don't think it it is a problem. The clause only says "you are expected to avoid any personal interest". Your wife's job is not your personal interest, thus it is not within the scope of the clause. Nor are you able to "avoid" your wife's job, given that you have no control over her employment. But do remember that your contract probably contains a duty of confidentiality, and if not this will be implied, so in theory at least you should to be careful what you tell your wife.

 

I have seen clauses (both in employment contracts and other documents) which refer to family members. For example, my firm's share dealing policy talks about family members and I have seen it in director-level contracts. If they wanted the contract to govern conflicts of interest of family members I think that would need to be spelled out expressly.

[david2000]

Thanks for all the replies

 

In my opinion it would definitely be a conflict of interest. The question is how enforceable it is. In one of my previous jobs I had a clause that stated I couldn't work for any competitor for the next 2 years, or they would fine me £3000 per day.

 

Bear in mind that in the field of electronics there could be patents and trade secrets involved.

 

Hi San_d, Where would the conflict of interest be? Surely, there would only be a COI if I were to discuss my work with my wife, AND act on it.

 

 

I do understand your problem here. Is strict confidential information or trade secrets involved? Patents and intellectual property?

 

They would still struggle to dismiss you, but as its a possibility, why don't you ask your HR Department in writing what their view is? That way you know where you stand.

 

Hi Becky. I suppose all the work I do for my employer has an element of secrecy about it, which would be useful to my wifes potential employer (The competitor), such as customer contact data. BUT, she used to work for my employer about 5 years ago, and she has plenty of that kind of data in her head! Hence, going it alone or working for a competitor.

 

 

'Her' business has a greater chance of being seen as 'our' business than working for someone else. Would be much easier if she would work for your employer though!

 

Hi Emmzzi, It will be 'her' business, so I think it's a matter of trust between my employer and myself thats really the issue here. I won't engage in her business and they have to trust me on that.

 

 

I don't think it it is a problem. The clause only says "you are expected to avoid any personal interest". Your wife's job is not your personal interest, thus it is not within the scope of the clause. Nor are you able to "avoid" your wife's job, given that you have no control over her employment. But do remember that your contract probably contains a duty of confidentiality, and if not this will be implied, so in theory at least you should to be careful what you tell your wife.

 

I have seen clauses (both in employment contracts and other documents) which refer to family members. For example, my firm's share dealing policy talks about family members and I have seen it in director-level contracts. If they wanted the contract to govern conflicts of interest of family members I think that would need to be spelled out expressly.

 

 

Hi Steampowered, I've read through my contract over and over, and I can't see any references to family members; it's all me me me! As far as I am concerned, my wife is her own person, and my employer should have no say in what she does with her life; they don't pay her anything so surely they have no jurisdiction over her. Surely it's against her civil liberties or human rights?

 

As far are confidentiality is concerned, I won't be disclosing anything, so again, it's a trust issue.

 

The only personal interest I can think of is that I want her to earn / make as much money as possible, so they may think that I will disclose useful information to her, but again, this is a trust issue, not conflict of interest.

[Emmzzi]

Have you ever seen your employer get rid of staff for dubious reasons?

[steampowered]

Hi Steampowered, I've read through my contract over and over, and I can't see any references to family members; it's all me me me! As far as I am concerned, my wife is her own person, and my employer should have no say in what she does with her life; they don't pay her anything so surely they have no jurisdiction over her. Surely it's against her civil liberties or human rights?

 

As far are confidentiality is concerned, I won't be disclosing anything, so again, it's a trust issue.

 

The only personal interest I can think of is that I want her to earn / make as much money as possible, so they may think that I will disclose useful information to her, but again, this is a trust issue, not conflict of interest.

 

Your contract does not refer to family members, so I think you are safe. I don't think this is a "personal interest" and you won't be in breach of failing to "avoid" it (since you can't control what your wife does).

[SNALF]

Hi David 2000. The ERA sub-section 98(1)(b) is essentially a catch-all provision and encompasses a wide variety of dismissals. Emphasis should be placed on the word “substantial”, however; if the dismissal is “whimsical, unworthy or trivial”, it will not suffice. It isn’t possible to provide a comprehensive list of reasons for dismissal under this sub-section, but here are a few that have been held potentially fair by the courts: unreasonably refusing to accept a reorganisation that changes employment terms (e.g., working hours); replacement by a better qualified employee;

end of genuine temporary employment; dismissal because of an irresolvable personality clash with a co-worker; the relationship between an employee and someone working for a competitor, where there is a genuine risk of revealing trade secrets; refusal of employees to accept a new restraint of trade clause in their contracts.

[david2000]

Have you ever seen your employer get rid of staff for dubious reasons?

 

Hi again Emmzzi, no I haven't ever heard of a case where this has happened, but then again, they only bought my employers company recently so I haven't had much experience with them yet.

 

 

Your contract does not refer to family members, so I think you are safe. I don't think this is a "personal interest" and you won't be in breach of failing to "avoid" it (since you can't control what your wife does).

 

Hi again streampowered, that's what I was thinking. My employer or me cannot control what my wife does with her life. It's not like I'm offering this information. And, like you said, I can't avoid her either.

 

Hi David 2000. The ERA sub-section 98(1)(b) is essentially a catch-all provision and encompasses a wide variety of dismissals. Emphasis should be placed on the word “substantial”, however; if the dismissal is “whimsical, unworthy or trivial”, it will not suffice. It isn’t possible to provide a comprehensive list of reasons for dismissal under this sub-section, but here are a few that have been held potentially fair by the courts: unreasonably refusing to accept a reorganisation that changes employment terms (e.g., working hours); replacement by a better qualified employee;

end of genuine temporary employment; dismissal because of an irresolvable personality clash with a co-worker; the relationship between an employee and someone working for a competitor, where there is a genuine risk of revealing trade secrets; refusal of employees to accept a new restraint of trade clause in their contracts.

 

Hello Employlaw, where it says 'the relationship between an employee and someone working for a competitor, where there is a genuine risk of revealing trade secrets' basically means, (I think) that, can they trust me enough not to divulge my employers 'secret' (Woooo!) information to my wife. Therefore, this is a trust issue, and they would surely have to prove beyond doubt that I passed on trade secrets (Customer info for instance) in order to dismiss me.

 

How about if my wife goes self employed? She will find her own customers, which may or may not be customers of my employer. The fact that some customers may be the same as my employers is a possibility, but that doesn't prove that I gave her this contact information from my employer, it doesn't make that fact, or the truth. If my wife kept records of how each customer is obtained, surely that ends the matter?

[SNALF]

Hi David. I'm afraid that they can dismiss you if there is a 'risk' that you could pass on information, not just when they think you have done so. In other words, if they don't trust you enough, they could dismiss without any need to show that anything has been passed on. If your wife becomes self-employed, she is a competitor and the risk is still there. It's not common reason to dismiss under SOSR (Some Other Substantial Reason) but they could do it and have it deemed fair.

[david2000]

Hi David. I'm afraid that they can dismiss you if there is a 'risk' that you could pass on information, not just when they think you have done so. In other words, if they don't trust you enough, they could dismiss without any need to show that anything has been passed on. If your wife becomes self-employed, she is a competitor and the risk is still there. It's not common reason to dismiss under SOSR (Some Other Substantial Reason) but they could do it and have it deemed fair.

 

Great! Guilty until proven innocent, and not even any proof needed either. I thought that we had very good employee protection in this country!

 

Thanks for all your answers guys. I'm off to see my solicitor for a better understanding of the issues.