Solicitor letter received re -breach of contract please help

[adele31]

Hello

 

 

ill try giving you the basics

 

My employment commenced on 18.2.13 as a field sales consultant. I have been in the same industry with my previous employer so in essence move across to the competition

 

The Director of the new company was more than happy for me to provide him with details for some clients i had previously visited and bring them across to his company.

 

Working for the company was ok until September 2014 when i was required to drive further and further each month. Somedays my 1st appointment was 180 miles away and my mileage increased from 700 per week to 1200 per week, which was exhausting.

 

Over the christmas break i decided enough was enough and to hand my notice in, I did so on 5.1.15. The Director was very arsey with me and told me he was not happy to pay me 3 weeks leave.

 

I started working for myself doing the same job 27.1.15, Today i received a letter from their solicitor with notice of intended legal action for breach of my contract as i have contacted some previous clients (these clients never agreed to do business with my ex-employer),

it does not state in my contract i cant contact clients, nor in the letter received to confirm my resignation,

But they are saying there are restrictive covenants in the company handbook.

I was not aware of a company handbook and have never been offered it to read!

As i work from home, Head office is 84 miles away and is only visited for 5 hours every 3 months for a team meeting.

the convenience in a nutshell are apparantly - must not work for a competitor in a 10 mile radius/operate in the same geographic area (which is 180mile radius)

- not to solicit current, past or prospective clients

- not to poach employees.

 

they are claiming i have contacted clients of which some i have and some i haven't contacted, that i have done business with a few and they want financial compensation for the same.

 

If i was aware of the alleged restrictive covenants, then i maybe would have acted a bit differently, but as they are not part of my basic 4 page contract, i have never read them or signed to agree to them.

 

Can they do this?

 

They are also saying it is company trade secret information - when the information can be obtained from yellow pages and google. All of our competitors call the same database system and again information can easily be obtained from there.

 

 

solicitor letter says my contract started 14.2.13 but i actually started and signed my contract on the 18.2.13.

 

any advice greatly appreciated as they want a reply as a matter of urgency

[Conniff]

There must be a handbook to give all the rules and regs of a company available to all employees. You shouldn't have to ask to see it. Do you feel confident enough to go visit you office and ask to see the handbook which should be within easy reach.

[BankFodder]

The courts are very reluctant to imply restrictive covenants into any employment contract in respect of an ex-employee. This is because they consider it very dangerous to fetter an individual's ability to earn a living.

 

If the courts are to enforce restrictive covenants then they must almost always be expressed in the contract and not implied. Also, they must be reasonable and very clearly outlined.

 

If the company handbook has not been specifically drawn to your attention and – I would say that that means that there is some writing in the basic contract which refers to it and requires you to read it and warns you that there are further terms and conditions in there then they will probably not be able to say that such a term exists. Additionally, if you can convince a court that you were never even told about the company handbook or its contents then it will be impossible for your employers to enforce a restrictive covenant.

 

I would say that your position should be that you ask that your employers provide evidence that they brought it to your attention. This would require, for instance, that they could provide copy correspondence either in hardcopy or by email saying that they were sending it to you and that you had to read it. Ideally they would need to be able to provide to the court a signed receipt for the company documentation that you would have received at the beginning of your employment

 

It might help also if you are able to find work colleagues who also have not received the company handbook – although it will be difficult to get them to help you while they are still in the employment.

 

Secondly, you talk about a restriction geographically – but you don't talk about a restriction in terms of how long it lasts. If the restrictive covenant contained in the handbook is open-ended and simply says you can't compete with in this particular area, then it won't be enforceable because the judges will not enforce an open-ended restrictive term.

 

Finally, the geographic area which is under the restriction must be reasonable in all the circumstances. You say that this is 180 mile radius. This means a diameter of 360 miles. You are talking here about the whole of the southern half of England, for instance. This would preclude you from working in a substantial part the country. My view is that this would not be enforceable.

 

Finally, it is very interesting that your employer was prepared to recruit you from a competing company and they had no scruples about asking you to compete within the same geographical area as your previous employer. Also, it is interesting that you point out that your employer had no scruples about receiving information about your previous customers.

 

In terms of the database, if all of your competitors use the same database then I can hardly see that there can be any applicable restrictive term as to its use. It is clearly not secret.

 

Therefore I would suggest that you write to them, that you reject their suggestion that there is any restrictive covenant in place. Point out to them that you have never been made aware of any restrictive covenant or a handbook in which it might be contained. You would be very pleased to receive from them any evidence that it had been given to you or that your attention had been drawn to its contents and that you had been warned that its contents were included as part of the contract. You also deny that you are affected by any restrictive covenant because now that you have become aware of the contents of the covenant it is quite clear that geographically it is too broad and also that it appears to be open-ended in terms of the duration of its effect. Say to them that you do not believe that any court would agree to enforce these kinds of term.

 

Finally, point out that the information which they would like to say is secret, is not secret. The information is on a database which is routinely used by everybody in the industry and the if your ex-employer wants to put that point forward in court they will make themselves look ridiculous.

 

In terms of contacting ex customers, – don't make any admissions – but simply point out that you remember that when you first started your employment your new employer was very pleased to receive information about the customers that you had been dealing with previously and it hasn't caused him any problem at all.

 

Tell them that you don't propose to get into any further correspondence about it but if they want to take you to court then so be it.

 

Do I understand from you that they still owe you holiday pay?

[Emmzzi]

arguabley, if it's not explicit in your contract, it is reasonable to assume an employer with a liberal approach to poaching one way would expect the same in the other direction...

[adele31]

The courts are very reluctant to imply restrictive covenants into any employment contract in respect of an ex-employee. This is because they consider it very dangerous to fetter an individual's ability to earn a living.

 

If the courts are to enforce restrictive covenants then they must almost always be expressed in the contract and not implied. Also, they must be reasonable and very clearly outlined.

 

If the company handbook has not been specifically drawn to your attention and – I would say that that means that there is some writing in the basic contract which refers to it and requires you to read it and warns you that there are further terms and conditions in there then they will probably not be able to say that such a term exists. Additionally, if you can convince a court that you were never even told about the company handbook or its contents then it will be impossible for your employers to enforce a restrictive covenant.

 

I would say that your position should be that you ask that your employers provide evidence that they brought it to your attention. This would require, for instance, that they could provide copy correspondence either in hardcopy or by email saying that they were sending it to you and that you had to read it. Ideally they would need to be able to provide to the court a signed receipt for the company documentation that you would have received at the beginning of your employment

 

It might help also if you are able to find work colleagues who also have not received the company handbook – although it will be difficult to get them to help you while they are still in the employment.

 

Secondly, you talk about a restriction geographically – but you don't talk about a restriction in terms of how long it lasts. If the restrictive covenant contained in the handbook is open-ended and simply says you can't compete with in this particular area, then it won't be enforceable because the judges will not enforce an open-ended restrictive term.

 

Finally, the geographic area which is under the restriction must be reasonable in all the circumstances. You say that this is 180 mile radius. This means a diameter of 360 miles. You are talking here about the whole of the southern half of England, for instance. This would preclude you from working in a substantial part the country. My view is that this would not be enforceable.

 

Finally, it is very interesting that your employer was prepared to recruit you from a competing company and they had no scruples about asking you to compete within the same geographical area as your previous employer. Also, it is interesting that you point out that your employer had no scruples about receiving information about your previous customers.

 

In terms of the database, if all of your competitors use the same database then I can hardly see that there can be any applicable restrictive term as to its use. It is clearly not secret.

 

Therefore I would suggest that you write to them, that you reject their suggestion that there is any restrictive covenant in place. Point out to them that you have never been made aware of any restrictive covenant or a handbook in which it might be contained. You would be very pleased to receive from them any evidence that it had been given to you or that your attention had been drawn to its contents and that you had been warned that its contents were included as part of the contract. You also deny that you are affected by any restrictive covenant because now that you have become aware of the contents of the covenant it is quite clear that geographically it is too broad and also that it appears to be open-ended in terms of the duration of its effect. Say to them that you do not believe that any court would agree to enforce these kinds of term.

 

Finally, point out that the information which they would like to say is secret, is not secret. The information is on a database which is routinely used by everybody in the industry and the if your ex-employer wants to put that point forward in court they will make themselves look ridiculous.

 

In terms of contacting ex customers, – don't make any admissions – but simply point out that you remember that when you first started your employment your new employer was very pleased to receive information about the customers that you had been dealing with previously and it hasn't caused him any problem at all.

 

Tell them that you don't propose to get into any further correspondence about it but if they want to take you to court then so be it.

 

Do I understand from you that they still owe you holiday pay?

 

Thanks for the advice i will draft a letter back to the tomorrow

 

They owe me 3 weeks notice leave and 2 days holiday pay which is not due till 15.2 i don't think they will pay it me now tho

 

i just found all the email off them saying they will action all the leads i provided to them when i joined and it clearly states where they came from. he also payed me more money on the leads i brought over and signed up.

[BankFodder]

In that case, I would refer to the outstanding money and tell them that they are in breach of contract by withholding it. You could sue them for it if you wanted

Very interesting that they apparently rewarded you for doing precisely what they are complaining about now.

[becky2585]

Restrictive covenants contained in a handbook cannot be legally enforced. They must be in your contract to have valid legal effect.

 

The best thing you can do is completely ignore the letter. If you respond, you'll only end up with a plethora of correspondence.

 

Believe me, there's nothing more irritating than sending a letter before action and getting no response at all just file it under B for bin - unless you've misused their confidential information, they won't succeed in pursuing you.

 

(We often get instructed by employer clients to send letters alleging a breach of restrictive covenants which have no chance of being enforced in the hope that the ex-employee will worry enough to cease their activities.)

[adele31]

just found this! (see pic)

 

i honestly didn't know we had a handbook with other terms in it, i have definitely never seen, read or signed anything to confirm its existence (other than the bottom of my basic 4 page employment contract).

 

they advise the covenants are all in place for 6 months inc the geographical restriction, my area covered from top of derby to south wales, mid wales, west mids, bristol, staffordshire - a massive area.

 

but i do agree with poaching comment, they've poached staff from competitors, they've rewarded leads&business bought across from competitors, yet they want to take me to court for doing something they approved of when i joined.

 

most of the clients i have contacted advised they weren't prepared to do business with my ex-employer due to their charges and their pestering.

i have been very clear with the clients advising i have left and am working for myself - whereas they have contacted clients and deceived them by telling them I'm off on long term sick

[adele31]

Restrictive covenants contained in a handbook cannot be legally enforced. They must be in your contract to have valid legal effect.

 

The best thing you can do is completely ignore the letter. If you respond, you'll only end up with a plethora of correspondence.

 

Believe me, there's nothing more irritating than sending a letter before action and getting no response at all just file it under B for bin - unless you've misused their confidential information, they won't succeed in pursuing you.

 

(We often get instructed by employer clients to send letters alleging a breach of restrictive covenants which have no chance of being enforced in the hope that the ex-employee will worry enough to cease their activities.)

 

 

what do you mean misused confidential information?

i handed back all the files and they locked me out of my online diary/database the day i resigned, the clients i contacted were from memory & google

[becky2585]

what do you mean misused confidential information?

i handed back all the files and they locked me out of my online diary/database the day i resigned, the clients i contacted were from memory & google

 

Then you haven't misused it.

 

If you'd copied customer lists to contact them, that would be misuse, notwithstanding any contractual restrictions (or lack thereof).

 

A letter of that nature is always concerning, but I can't see that it has a likely legal basis.

[billathome65]

Becky am I not right in thinking that by not replying that you are aggreing by acquiescence?

 

I was always led to believe the best way is to respond by asking for proof of claim and then threatening police / legal action for harassment if they tried to pursue after not providing evidence of claim?

 

Can you clarify?

 

Cheers Bill

[becky2585]

Becky am I not right in thinking that by not replying that you are aggreing by acquiescence?

 

I was always led to believe the best way is to respond by asking for proof of claim and then threatening police / legal action for harassment if they tried to pursue after not providing evidence of claim?

 

Can you clarify?

 

Cheers Bill

 

Not in this situation. Usually a letter of that kind, which is designed to scare an employee into no longer competing, is accompanied by an undertaking that the solicitor wants to get the employee to sign - the result being if they breach the undertaking, it could give rise to a claim, even if the original covenant was never enforceable...

[steampowered]

I would write back along the following lines:

 

• You have never seen or been offered the employee handbook, and cannot be considered bound by a restrictive covenant which you were never aware of.
  
• The restrictive covenant is unreasonable and could not be enforced in any event.
  
• The allegations made are not correct and you require evidence.
  
• You have not used any company trade secret information; all such information being available in the yellow pages.
  

Personally I think you should reply as it indicates that you would be serious about defending this.

 

 

I think you should mention the money that is outstanding. It is then up to you whether you want to 'poke-the-bear' by pursuing it.

[billathome65]

Not in this situation. Usually a letter of that kind, which is designed to scare an employee into no longer competing, is accompanied by an undertaking that the solicitor wants to get the employee to sign - the result being if they breach the undertaking, it could give rise to a claim, even if the original covenant was never enforceable...

 

Cheers for that

 

Bill

[adele31]

Hi

 

Thanks everyone for the information and guidance, i havent responded to the letter, so just awaiting their next course of action