after some real world advice if possible from the STA collective. I will seek proper legal advice shortly but wanted some comfort from real people.
I recently made a big decision following the loss of a major contract to move jobs. Thing is I have accepted a job with my business main competitor and I have a 3 month anti competitor clause in my contract. Which is being upheld by my current employers. My issue is not with the clause just that I cannot afford to have 3 months of no wages whilst I wait for this clause to serve its time. I have worked for my current employer for 10years and in the same industry for 20, so I am somewhat hamstrung by this clause as it limits me from working in the motor industry.
Im just looking for some comfort or advice really, I’m pretty sure I am going to speak with a legal advisor shortly, any recommendations for good quality, reasonably priced advice? Don’t fancy shelling out thousands if I am likely to have to take 3 months unpaid leave
Summer job?
How much notice are you on?
I'd ask to stop work 'now' and use the notice period as a part of the 3 months (plus any holiday accrued).
Then talk to new employer and see if they'll start paying you to 'study at home' or something a month before you officially start.
Is that not what gardening leave is for? 3 Months paid leave at the expense of your current employer. Otherwise bugger them.
I've got one in my contract.
The advice I was given is that it's unenforceable and a reasonable company (that doesn't want to be taken to court) would most likely offer it as gardening leave and get you to sign something to say you're waiving your rights (see below) in return for that (or put you on other work where you won't be doing anything commercially sensitive).
But if you don't sign somethign to say your waiving your rights you can claim unfair dismissal as they're not giving you the work to do and therefore your skills are becoming outdated, probably more relevant to something like the bleeding edge of IT where 6 months (notice + gardening leave) old might be antique.
IANAL
I very much doubt that 3m months clause coving a whole industry would be considered reasonable.
Also what can the current company actually do? Sue you for breach of contract? They would have to show losses IIRC to have any chance of winning.
I' would simply ignore the clause
It was common in a few industries but I think it's down under a restriction on your right to work - until we leave the EU
I seem to recall that as tested in court, they can't stop you going to a competitor if it is skill based employment. But something like sales where contacts are a crucial part of your job, then they can enforce it.
I’ve got one in my contract.
The advice I was given is that it’s unenforceable and a reasonable company (that doesn’t want to be taken to court) would most likely offer it as gardening leave and get you to sign something to say you’re waiving your rights
I was advised (by my cousin who's a solicitor but not a specialist in employment law) that it's better to work along with it... the company doesn't want to go to court but ideally neither do you. Just as a general contract thing ...
Last time I switched jobs I made it my employers problems (mostly)... My old employer wanted me to do something before I left... which I agreed to if they were flexible on the 3mo... in this case "the thing they wanted me to do" wasn't a direct competition for the new employer ...
Not enough info in OP but assuming you are taking a similar role with main competitor then 3 months could well be enforceable. It's about what is necessary to protect your former employer's legitimate interests. If your role was customer-facing or you had access to customer lists or proprietary information then that is likely to be a factor.
If, on the other hand, you had no customer contact and access to no confidential info at all then that could be used to argue that the restrictions are unnecessary.
go work for someone for a day, free of charge if you have to.
tjagain
Also what can the current company actually do? Sue you for breach of contract? They would have to show losses IIRC to have any chance of winning.
I’ would simply ignore the clause
V dangerous and ill-informed advice TJ, sorry - a former employer can seek an injunction to prevent you from working if you have enforceable clauses in your contract of employment.
Having recently acting for a client who nearly lost his house because of potential breaches of a non-compete clause, it seems to me that advising anyone to ignore them without the benefit of proper advice is foolhardy.
A friend had this and his solicitor said if X is your main trade you can not be denied your living. Your situation may be different.
I have a call tomorrow to discuss, but given I have not been put directly on garden leave to me suggests they can’t be that worried about how I may act in a competitive manner? So making me work my notice for 3 months then expecting me to rot for 3 months is unreasonable.
I am in a sales role, but more Technical sales...for what of a much more better description. As it’s a Specialized field.
I really hope it doesn’t get messy as I genuinely want to leave with my head held high and with an open door as I really do wish them well for the future !
Boris....?
MSP is right, they are almost always unenforeable.
They have to be very specific about which knowledge they are trying to prevent you from using at the competitor so they can put a value on it, for instance a recruitment agent using their existing client contacts for a new firm
They can't prevent you from using skills you've acquire once you've left despite what it says in the contract.
My contract has a 6 month clause.
I will be completely ignoring it.
For reference it is a slightly different...but broadly the same role. There are significant diffferences but my new employer is named in my anti competitor clause in my existing contract.
I have told my new employer of the situation. It maybe I have to negotiate an advance as part of my package so I can sit back and wait...if they are willing to accept I can’t start for 6 months that is
Ok jakester.
the OP did say he would be taking proper advice. I didn't put a caveat in mine tho which I should have done stating " get real advice"
The key point is "enforcable" which as you point out can happen but is rare.
V dangerous and ill-informed advice TJ, sorry – a former employer can seek an injunction to prevent you from working if you have enforceable clauses in your contract of employment.
Only likely to happen with very senior roles as the cost of the injunction would be high, esp if then over turned and costs awarded against them etc.
Non competes can be very much deployed but under specific circumstances, for instance if you will be dealing with the same clients in the same role/business area in the new role.
I'd discuss this with your current employer if you are certain you are leaving and if you have a contract for the new role. Also "I can't afford to lose 3 months wages" is not a valid reason for ignoring a non compete.
Finally as an aside much of this depends on how cordial your leaving will be. I know (and have worked in) companies that will just vindictively pursing a ex-employee moving to a bitter competitor over a non compete.
From personal experience as the employer, they are not worth the paper they are written on.
footflaps
Only likely to happen with very senior roles as the cost of the injunction would be high, esp if then over turned and costs awarded against them etc.
Again, not my (professional) experience...
companies that will just vindictively pursing a ex-employee moving to a bitter competitor over a non compete.
It's not necessarily purely vindictive rather it signals others they are willing to go to the cost and effort.
Part of my previous negotiation was that the employer I was leaving didn't want this publicised
As a benefit though I still have a reasonably open return possible and as a few of the management have also moved on I have a opening with them as well as someone willing to work with an employer... so even if someone simply asks them "Linked in say's you worked with such and such at such and such" they are far more likely to give me a "good bloke" unofficial recommendation.
In fact my ex-boss has now returned to the company ... and he knows his decision to leave was part of my reasons to leave.
IANAL either.
As others have mentioned, particularly in a sales role then aren't these usually related to your contact list?
So you cannot take your contact list to your new job. Don't start emailing existing contact lists to your personal email address for future use. Your existing employer WILL be monitoring what if anything you are sending 'home' and will no doubt use it against you.
When you start your new role you can't contact any of these existing contacts to try to sell from your new place for the first three months.
However you can make sales to new business i.e. clients that you haven't come into contact with during your existing role.
Get proper advice.
If they want to enforce 3 months, then they really need to pay you not to work for a competitor i.e. paid gardening leave. Restrictive covenants on employment are very hard to enforce unless you are using your employers intellectual property / doing 2 jobs at once. Make sure you don't have any work stuff on your home computer / documents at home etc.
Again, not my (professional) experience…
Care to give an example (just salary bracket and industry)?
Couldn't you use a variation of the bosman ruling
mickmcd
that is why most of these anti competitor clauses are not enforcable
Well it looks like the OP will have to get legal advice for his specific situation. In principle broad restrictions are unenforceable but specific limited restrictions might be successfully enforced and it does sound like his employer has reasons to believe they have a legitimate business interest in the restriction, especially as they specifically name his new employer.
Just to say to those who say "not worth the paper they are written on". It very much depends. I've been involved in a number of cases over the last couple of years where my current company has successfully enforced and is currently enforcing non competes.
@thecaptain - spot on - OP get legal advice
I had a big one in my contract and got advice on my future contract.
in short it was as per
chipsngravy
From personal experience as the employer, they are not worth the paper they are written on.
To the point that it's actually illegal to place restrictions on a persons future employment if it restricts their ability to work.
This changes if you're a director or shareholder but as an employee it's pretty clear cut.
http://www.lindermyers.co.uk/are-restrictive-covenants-enforceable/
So you cannot take your contact list to your new job. Don’t start emailing existing contact lists to your personal email address for future use. Your existing employer WILL be monitoring what if anything you are sending ‘home’ and will no doubt use it against you.
Surely you would have done this before handing in your resignation
How big is the industry?
Legally they may not have any claim, but it is something you agreed to, and if you go back on that it may not help you the next time you need to change jobs.
I'd be looking at some kind of compromise, of working on different projects/role for the next 3 months.
Basically, dont burn any bridges.
Legally they may not have any claim, but it is something you agreed to, and if you go back on that it may not help you the next time you need to change jobs.
I’d be looking at some kind of compromise, of working on different projects/role for the next 3 months.
Basically, dont burn any bridges.
Definitely... and the smaller industry area you are in the more important.
A mix of paid gardening leave and working/handover can be in everyones interests... and if you show flexibility and willingness and can document it is only going to help if it does "go legal". (That said I'd still get legal advice anyway based on the specifics)
From my experience technical and sales is very much enforceable especially as you are moving to the main competitor.
so by enforceable I mean you and possibly your new employer will need to go to court so unless you are worth many many thousands to them to poach as an advantage (which lends itself to the you have specialist knowledge argument) they won’t touch you. You can win a ruling (or be able to) but still be without the job. I speak as someone who has seen many enforced and all of ours are 12 months minimums...
if the other company wants you. Use all your holiday as part of the 3 months from both companies then spend a few months on training and induction. If you expect to leave your company and jump straight into the same job for their main competitor you will have issues.
Also going legal is likely to take more than 3 months and cost a good chunk during which time you won’t be working for either company...
How does your existing company know where you'll be going to enforce these clauses?? Do they rely on you telling them?
so by enforceable I mean you and possibly your new employer will need to go to court
Yep.... and probably both old and new company have legal council on retainer... so the person with all the stress is the employee.
going legal is likely to take more than 3 months and cost a good chunk during which time you won’t be working for either company…
and be subject to a lot of stress and uncertainty...
How does your existing company know where you’ll be going to enforce these clauses?? Do they rely on you telling them?
If you are in a specific sector and have common partners and/or clients it's pretty obvious.
footflaps
Care to give an example (just salary bracket and industry)?
I'm a litigation solicitor.
Jakester, is this your field? If so can you PM me your contact details as I may have to seek some council following tomorrow’s meeting.
Thanks
Don't come on here with the proper qualifications and experience 🙂 - that would end too many STW threads!!
IME the legal advice you get will contain caveats, all cases have risks. Even the mere threat of legal action should make you stop and think. You could stand to lose more than 3 months salary not only ithr legal costs but in sleepless nights and your own reputational damage.
Happened that me. Fortunately mine attempted to prevent me working in any Finance based business throughout the UK so was unenforceable. Had it said "you cannot work (in your current role) for Barclays brokerage dealing with the same clients you are currently working with/seeking to gain work from - it would have been a different story. See advice specific to the circumstances.
Whether it be 3 months, 3 weeks or 3 days, the OP is going to be using his skillz in direct competition to his existing employer at some point. Reading between the lines , I'm assuming the the existing company has lost the contract to the new one and the OP's knowledge is going to help the new company run the new contract ?
Perhaps you could do some "unpaid" consultancy work for the new company during the 3 month period (strictly off the record of course) , and maybe have a "bonus" when you start work for real. Ahem..
