Restrictive Covenant

JAM1376

OK, typing very fast (should be working really) so please excuse any typos!

The employee coventants with the company that he or she will not within 30 miles (of where i ask, HQ or his current place of work)and for the period of 12 months after ceasing to be employed without the prior written consent of the Board either alone or jointly with or as Manager, Agent, Consultant or Employee of any person, firm or company directly or indirectly carry on or be engaged in any activity or business which shall be in competition with the business of xxx.

It sounds very official and I'm just worried that the not nice boss (on the board as he owns the company) might refuse to give him permission if the need arises.

If they say 'no' as and when he asks to join another company, do they need to have a good reason?

Thank you!!!

Lawyer2B

Restraint of trade clauses are valid and enforceable at common law only if they protect a legitimate trade interest of the employer eg goodwill, are not against public interest and reasonable between the parties.

Put simply if the courts decide unreasonable then it is unenforceable but depends on all the circumstances of the case.

There is room for negotiation here. If your OH is willing to accept the restrictive covenant then he could haggle over the probation period reducing it to say 6 months.

JAM1376

Just to let you know, we did a letter last night asking for the restrictive bit to be removed from the contract as 1) he is not a sales person and so has no acces to client details and 2) he has no technical knowledge of the way the product is made (in Spain) so he would not affect his current company's business if he did move to another place.

We have asked why he is still on probation but are less bothered about this now after peoples advice on here (thank you). We just want the other bit removed (or reduced greatly).

Will let you know what they say. Thanks for all your help.:beer:

JAM1376

Hi again

Just to let you know my OH employers have refused to change anything in the contract. We are thinking of him just signing it and, if he is offered another job, let his current company take him to court if ness as we think it will be thrown out (as it would not affect his current companies business in any way).

It's either that or they will hold him to his verbal notice that he gave in two weeks ago (which we really don't want as we need his wage!).

Does this seem like a reasonable plan???

Savvy_Sue

I think it sounds reasonable. But I'm no expert!

LittleVoice

What proof do they have of the oral resignation?

3plus1

Perhaps me being a bit thick here, but I read through the above posts and I couldn't work out your OH's industry and his position within the company?

Restrictive covenants are quite common with certain jobs and yes, enforceable. If the terms of the covenant are reasonable, you can't just sign for the sake of signing, get another job that breaks the covenant and hope no one chases you.

If any part of the covenant is unreasonable, the whole thing is an unfair contract term and it will be thrown out by a court if you end up going down the legal route. It's pretty difficult to comment on what is reasonable and what is not without knowing the specifics of your OH's job and his industry.

Depending on the industry and the job, it could be unreasonable for a covenant to cover areas more than 2 miles away (e.g. milkman) or perfectly reasonable for a covenant to cover the whole world (e.g. international arms seller).

If you are convinced that the covenant is unreasonable (and I would strongly recommend getting a second opinion from someone with the necessary knowledge to make that call) then you can happily ignore it and not think twice about signing. But you should take steps first to make sure this is actually the case.

Hope the above made sense - it's very early and my brain isn't quite switched on yet...;)

cazziebo

3plus1 wrote: »

Perhaps me being a bit thick here, but I read through the above posts and I couldn't work out your OH's industry and his position within the company?

Restrictive covenants are quite common with certain jobs and yes, enforceable. If the terms of the covenant are reasonable, you can't just sign for the sake of signing, get another job that breaks the covenant and hope no one chases you.

If any part of the covenant is unreasonable, the whole thing is an unfair contract term and it will be thrown out by a court if you end up going down the legal route. It's pretty difficult to comment on what is reasonable and what is not without knowing the specifics of your OH's job and his industry.

Depending on the industry and the job, it could be unreasonable for a covenant to cover areas more than 2 miles away (e.g. milkman) or perfectly reasonable for a covenant to cover the whole world (e.g. international arms seller).

If you are convinced that the covenant is unreasonable (and I would strongly recommend getting a second opinion from someone with the necessary knowledge to make that call) then you can happily ignore it and not think twice about signing. But you should take steps first to make sure this is actually the case.

Hope the above made sense - it's very early and my brain isn't quite switched on yet...;)

Very sensible!

(Restrictive covenants can be and are enforced - because many companies don't pursue there is a bit of an idea around that they're "not worth the paper they are written on". if you sign it then you are effectively agreeing to it - the onus would then be on you to prove it was unreasonable later.)

JAM1376

Morning

Firstly, they have no proof of the oral resignation although when it has been mentioned in conversations, my OH has not denied it to anyone.

I didn't really want to mention the industry in case anyone from his company reads on here! Naff it...he works for a company that supplies ink to a printing house. He works on the print house site, making sure the presses are kept supplied with ink. He has no sales responsibilities and has no knowledge of the ink technology (as it is brought in from aborad). He has done this job for other ink suppliers on different customer sites (print houses) for 20 years and has never heard of anyone in his position having a restriciton on them. Ok, yes if he developed the ink or had lots of sales contacts but he doesn't.

Being told he cannot work in anything to do with ink for 12 months in a 30 mile radius of home seems unreasonable to me, especially as he had 20 years experience he brought to the current company and they had very little.

Now you have more details, do you think it will stand in court? Opinions appreciated!:beer:

PS Spoke with ACAS and they just said, as we kind of know, thats its a gamble if he does sign.

cazziebo

This is only a personal opinion and you should read it as such.

Most restrictive covenants are not pursued because the effort and money required is really not worth it - unless the person can cause serious damage to the business. (But if pursued then they can win and I've worked for a company that took many people to court over it - and the worst effect is that it seriously p***** the person's new employer).

Your OH may not be in sales or R&D but if he is working on client sites then he will have knowledge which will be of use to a competitor - just who supplies ink to certain companies is valuable knowledge. However, if he isn't aware of commercials eg prices, margins, quantities, then this info is of limited value.

Whatever, it seems to be a gamble which, on balance I would sign. The twelve months probation is neither here nor there - as other posters have said it does not affect his statutory rights.

If I was being cynical, I might be a bit suspicious about timing and I wouldn't be happy to sign with this "oral notice" overhanging everything. It could be that the company could hold him to it and use the signing of the Contract to be a way to tie him into the covenant. (It doesn't have to be in writing just as an offer doesn't have to be in order to be binding. If there are witnesses then he's on shaky ground) I really think your OH should seek to clarify the position on this before signing.