An employment question Re: Preventing you from changing jobs locally

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  • An employment question Re: Preventing you from changing jobs locally
  • An employer states in their T&C’s that you cannot work for a competitor within a certain radius of your current employment.

    Is this fair/reasonable? The distance is circa 40 miles!

    The person who is a Vet was contractually obliged to live locally to her new job and has bought a house there due to an on-call element. Now the employer is saying she can’t move jobs to a competitor. Have they got a leg to stand on apart from perhaps with-holding a reference?

    allthegear
    Member

    No leg to stand on whatsoever.

    Nope nothing doing there.

    I just plotted it on a map and it covers an area of 2,500 square miles!

    Would they be able to with hold a reference?

    MSP
    Member

    I am pretty sure that these types of clauses have been taken to court and judged an unfair practice. However many employers still include them in T&C’s as workforce legal protection is so weak.

    Flaperon
    Member

    Actually, it’s closer to 5000 square miles…

    scotroutes
    Member

    Fursty Ferret wrote:

    Actually, it’s closer to 5000 square miles…

    Mibbe half of it is ocean? πŸ˜†

    The area is roughly 40×60 miles…whatever area that is πŸ™‚

    crankboy
    Member

    The answer is it depends. But my employment law is not up to date . Such clauses can be valid. As your post is worded it comes across if the clause was not in the contract but elsewhere, I assume that is wrong. If it was not in the contract then terms and conditions are irrelevant. If the term is part of the original contract then from memory the clause will only be effective if it is reasonable or can be made reasonable by deleting bits without rewording or addition. 40 miles on the face of it seems a bit wide ranging ,is it a rural big animals practice? Maxim the guy who invented the eponymous machine gun was subject to a valid worldwide clause .

    It was in contract when the person joined. The new place isn’t even that close, 20 miles maybe?!

    Premier Icon finishthat
    Subscriber

    utter bolleux – contractual idiocy – can be a sign of a poor or ill informed employer.

    MSP
    Member

    valid worldwide clause

    Not legal under European and UK law. It is a restraint of trade, the law is quite clear on that. What you can’t do is steal clients or use proprietary information/technology that was developed specifically for the company you were working for. However if you are taking just your own skills as a vet/electrician/weapons designer, there is nothing they can do legally to prevent you from moving to a new company.

    However they can play dirty tricks with references so it is best to seek an amicable departure if possible.

    Premier Icon theotherjonv
    Subscriber

    Actually it’s not illegal to prevent you leaving to join a competitor in the same industry / area / within a certain timescale. It can be quite legal, but to be so, the first employer should be offering something in return for that consideration, and simply offering employment itself would not normally be considered sufficient.

    If they had said we offer you employment, plus a million pounds which we give you in consideration that in the event that if you leave you don’t join a competitor, they might be able to get that to stick. But as above, if all they offer in return for your everlasting loyalty is the job itself….. no.

    Premier Icon slowoldgit
    Member

    Isn’t this what gardening leave is about: stay out of the office and don’t work for anyone alse until your knowledge of corporate stuff is no longer current and useful?

    konabunny
    Member

    Not legal under European and UK law. It is a restraint of trade, the law is quite clear on that.

    Just because it is a restraint on trade it doesn’t mean it is unenforceable. Your second sentence doesn’t substantiate your first. Noncompetes are enforceable if properly drafted.

    Crankboy is right. You are wrong.

    mikewsmith
    Member

    slowoldgit – Member
    Isn’t this what gardening leave is about: stay out of the office and don’t work for anyone alse until your knowledge of corporate stuff is no longer current and useful?

    It’s for a Vet, the issue is that when you move to a close by practice the people who like to see you will follow. Moving generally not an issue but putting an ad in the paper saying that X has just joined from Y is taking the piss.

    footflaps
    Member

    Contract law cannot over rule statute, so the restraint of trade statute has precedence. That said, whether or not the restriction in the contract is determined to be a ‘restraint of trade’ would need to be tested in court. However, unlikely it would be enforced as all the employer could do is sue, which is expensive and there is no guarantee of outcome.

    RichPenny
    Member

    How would they enforce it?

    Premier Icon chakaping
    Subscriber

    Friend got taken to court by arsehole employer trying to enforce this sort of crap.

    He won but found it all v stressful obvs.

    mikewsmith
    Member

    RichPenny – Member
    How would they enforce it?

    you don’t need to

    chakaping – Member
    Friend got taken to court by arsehole employer trying to enforce this sort of crap.

    He won but found it all v stressful obvs.
    You just need to make the process seem difficult and stressful enough to persuade people not to do it.

    Premier Icon benji
    Member

    I signed a contract when working on r&d stuff, that I wouldn’t go to a competitor and work on a similar product taking technology we had worked on due to ip rights, etc. Which wasn’t a problem as I changed sector completely.

    konabunny
    Member

    Contract law cannot over rule statute, so the restraint of trade statute has precedence. That said, whether or not the restriction in the contract is determined to be a ‘restraint of trade’ would need to be tested in court. However, unlikely it would be enforced as all the employer could do is sue, which is expensive and there is no guarantee of outcome.

    The question isn’t whether it’s a restraint of trade – it clearly is – it’s whether it’s an unreasonable one.

    Premier Icon theotherjonv
    Subscriber

    It’s whether it’s a reasonable one……. and whether you’ve been compensated for agreeing to restrain yourself. As above, a contract (or in my case a later ’employee handbook’) whether or not you knew about it / signed up to it simply to get or keep your job is not normally sufficient. But if they compensate you in addition, then they may have a case.

    toys19
    Member

    A quick google shows that footflaps and others are correct from hereand here

    the restrictive covenant is void on the grounds that it is a restraint of trade and contrary to public policy. It follows that an employer is generally not entitled to protect himself against competition from his ex-employees

    The first thing to note about restrictive covenants is that they are void as a restraint of trade. Any attempt by your employer to deny you the right to make a living in your chosen industry or profession is taken very seriously by the court. If, for example, your contract of employment imposes a blanket ban on you working for a direct competitor of your employer, even for a short period of time, this is unlikely to be enforced by the court

    Premier Icon andermt
    Subscriber

    Isn’t this what gardening leave is about: stay out of the office and don’t work for anyone alse until your knowledge of corporate stuff is no longer current and useful?

    I was told of a case in F1 where the team put the employee into gardening leave for 2 years, contract said he couldn’t work on any F1 stuff (even in private although not sure how that was enforcable).

    Employee fought and won based on the fact that 2 years away from his chosen profession would make his worth to his new employer low so his career was at risk so it was an unreasonable clause.

    Premier Icon dannybgoode
    Subscriber

    Gardening leave in general though is a little different from being told you can’t leave to work for a competitor as you are being compensated for not working.

    Of course in a very specialist sector like F1 there will be reasonableness tests as to how long gardening leave can last for but in general 1-12 months is not uncommon depending on the sector.

    What an employer cannot do is say we accept your notice wef whatever date but you cannot then go on to work for a competitor.

    They can (and do a quick google search for Towergate restrictive covenant cases) restrict you from approaching certain clients or from poaching other staff – say the 10 largest clients or whatever.

    A chap left Towergate, took a team of people with him, approached a large number of clients and was left somewhere in the region of Β£1.5m worse off following judgement

    He fought the covenants on the basis they were a restriction on trade but because they were very specific and not a blanket ban on him trading the case was ruled against him.

    It was seen as a big test case in the insurance industry as prior to this restrictive covenants had been assumed to be pretty much unenforceable but due to the way they were worded in the Towergate contract they very much were.

    EDIT – re: the reference. There is no duty on an employer to give a reference and some firms have a policy now that no reference will be given.

    Any reference though must be entirely factual and these days pretty much consists of yes soandso did work here between x and y dates had 4 days off sick and didn’t have any formal disciplinary action.

    Gone are the days where the boss then adds ‘but I though he was a complete dickhead and would not employ him again as long as I have got a hole in my arse’

    It’s a civil matter. All the employer could do is sue the ex-employee.

    They would have to prove that the had suffered a material loss which then financial compensation would be have to be paid.

    Unlikely they would succeed.

    Note – I am not a lawyer. Suggest you friend speaks to ACAS for free advice.

    Premier Icon nickc
    Subscriber

    Gone are the days where the boss then adds ‘but I though he was a complete dickhead and would not employ him again as long as I have got a hole in my arse’

    I find a simple ” would you re employ this person” gives me pretty much the answer I need every time

    Premier Icon richmars
    Subscriber

    I’ve worked in the same hi tech industry around Cambridge for the last 25 years. Every contract I’ve signed has this sort of thing, but it’s never been applied (if it’s possible). Given the industry I’m in, and the number of companies within 25 miles of Cambridge, most people have swapped companies several times (we call it ink jet bingo, the most is about 5 differant campanies).
    So it seems that companies still put it in contacts, but everyone knows it means nothing.

    Premier Icon cynic-al
    Subscriber

    Toys19, here’s a quote, from your first link:

    A restrictive covenant is typically clause in a contract which prohibits an employee from competing with his ex-employer for a certain period after the employee has left the business, or prevents the ex-employee from soliciting or dealing with customers of the business by using knowledge of those customers gained during his prior employment.

    The starting point for any such post-termination restriction is that it is void on the grounds that it is a restraint of trade and contrary to public policy. It follows that an employer is generally not entitled to protect himself against competition from his ex-employees. However, if the ex-employer can convince a court that the covenant is:
    designed to protect his legitimate business interests; and
    that it extends no further than is reasonably necessary to protect those interests then it will be upheld and enforced

    πŸ™„

    nealglover
    Member

    The area is roughly 40×60 miles…whatever area that is

    If it’s a “radius” then surely the area is a circle ?

    πŸ˜‰

    Premier Icon slowoldgit
    Member

    It might be a county – easy to define and determine.

    (edit) for ng, I think the OP was guarded or brief, or both.

    nealglover
    Member

    I just presumed, as it said radius in the OP.

    toys19
    Member

    cynical-al, which does not contradict what I posted – it says

    employer is generally not entitled to

    ie generally, so yeah if the bit that you posted applies, but I find it hard to imagine proving this. We know the law is meant to be combative, ie tested to find the right solution, so what I posted is not definitive, as you well know it is quite hard to find any aspect of UK law that can not be challenged, even statute.

    Junkyard
    Member

    as above generally not enforceable and as long as they did not take business with them then it would be hard for the employer to show a loss

    It is best to be amicable – ie leave and agree to turn down any business directly linked to their work at the current employer [ for a time limit of say 1-2 years]that approaches them as a result.

    Premier Icon theotherjonv
    Subscriber

    JY, you’re too kind.

    I’d agree that it would be a decent compromise not to approach previous clients either directly or indirectly (eg; advertising on the new practice’s website that so and so has now joined), but if clients seek out where she’s gone to themselves, surely they’re free to do just that?

    Otherwise she’s effectively telling her previous clients that they aren’t free to choose where they place their business, and their choice is either to stay at the old place or if they don’t like the remaining staff there, to go a third practice.

    konabunny
    Member

    Toys19: I think you’ll find that the links you posted actually contradict the people who you think you’re supporting and support the people you think you’re contradicting! πŸ˜€

    Premier Icon cynic-al
    Subscriber

    toys19 – Member
    cynical-al, which does not contradict what I posted – it says
    employer is generally not entitled to
    ie generally, so yeah if the bit that you posted applies, but I find it hard to imagine proving this.

    You seem to think the exceptions, where the restrictive covenant is valid, are rare. Unless you’ve some idea of the case law, then your opinion is pretty meaningless IMO – plenty of them are valid.

    toys19
    Member

    My mate is a barrister specialising in employment I asked for case reference. She said she couldn’t be arsed to get involved in a lame discussion on the internet and pointed me at those two websites and said she has never had an employer win when they try to stop an employee working for a competitor.
    Meanwhile, Al can’t you find some case law to prove me wrong? or give an example (related to the OP) Otherwise: back at ya!

    Kona, I don’t see it that way. Convince me baby (although my mate has me pretty convinced an she is a poor barrister).

    konabunny
    Member

    It speaks for itself – I don’t have to convince you! πŸ˜€

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