non competition - garden leave

Treacle1983

Just ending a 12 month fixed term contract.

Have received a letter today advising of a meeting on wednesday to discuss the non competition clause in my current contract.

My new employer is in the same area and same industry - there is a non competition clause in my contract stating 6 months and a three mile area of my current workplace.

Therefore if i accept this new job offer it will breach the non competition clause.

Can they enforce this - if it's them bringing my contract to an end - I am only skilled in this area of work and due to my disability would be unable to work outside of the 3 mile radius specified.

If they try to enforce would I be entitled to ask for garden leave for 6 months? Even though I only have 1 month's notice left to work? As they would be preventing me from getting work?

Or can i reasonably request they remove this clause and offer to sign something to say I won't approach any of my current clients?

Please note that this is a seperate issue to recent posts and I only want replies regarding this.

Emmzi

you cannot ask for paid garden leave for the 6 months. The clause was in your contract when you signed it and if you wanted an amendment the time to discuss it was then. So that is a no go.

Enforceability is a different matter. Hopefully SarEl will be along in a mo. I *think* they would need to prove an actual loss eg you had storlen their biggest clients or passed on information that gave the competitor an advantage they would not have had if you had not been there. It's hard to say without knowing what info you may have been privvy to, but you certainly can't ask clients to come with you.

Case law here http://www.personneltoday.com/articles/2007/03/06/39512/12-month-non-compete-restrictions-can-be-valid-thomas-v-farr-plc-and-hanover-park-commercial.html

Emmzi

actually, it might be helpful if you could type out the actual wording of the clause for us? To get a view on wether it is fair and enforceable or unreasonable and unenforceable.

Uncertain

My interpretation would be that this clause would be unenforceable, certainly at the end of the fixed term contract or if the employer terminated sooner.

Otherwise, taken literally, after a year's work for the current firm you would be unable to work in you own field for another six months.

Had you resigned mid way through the year they may be on stronger ground.

As I mentioned in your other thread you do need some professional advice about the whole situation.

SarEl

Treacle1983 wrote: »

Just ending a 12 month fixed term contract.

Have received a letter today advising of a meeting on wednesday to discuss the non competition clause in my current contract.

My new employer is in the same area and same industry - there is a non competition clause in my contract stating 6 months and a three mile area of my current workplace.

Therefore if i accept this new job offer it will breach the non competition clause.

Can they enforce this - if it's them bringing my contract to an end - I am only skilled in this area of work and due to my disability would be unable to work outside of the 3 mile radius specified.

If they try to enforce would I be entitled to ask for garden leave for 6 months? Even though I only have 1 month's notice left to work? As they would be preventing me from getting work?

Or can i reasonably request they remove this clause and offer to sign something to say I won't approach any of my current clients?

Please note that this is a seperate issue to recent posts and I only want replies regarding this.

Yes, this is very probably enforceable, although you would need legal opinion on the actual wording to confirm this. Generally such clauses are enforceable if they are very limited in their geographical boundaries (and 3 miles is very reasonable). And six months is also a reasonable period of time for it to be in force. So the answer is that if they decided to sue in the event of a breach, they may very likley win. Plus they could sue your new employer too, if they induced you to breach the clause.

And no - you are not entitled to six months gardening leave. But you already knew that since you have already been told that you aren't entitled to any gardening leave, never mind 6 months worth.

Your personal circumstances have no relevance to the enforceability or otherwise of the clause.

You can request anything you like. Whether they will agree to it or not is, however, a different matter. You have no right to insist that the clause is removed.

Uncertain

SarEl wrote: »

Generally such clauses are enforceable if they are very limited in their geographical boundaries (and 3 miles is very reasonable).

Yes, I had somehow not spotted the 3 mile bit in the original post so I would incline to 60:40 in favour of the clause being reasonable.

Zazen999

I suppose at least they are meeting with you to discuss it.....rather than not discussing it and just enforcing it....

SarEl

Uncertain wrote: »

My interpretation would be that this clause would be unenforceable, certainly at the end of the fixed term contract or if the employer terminated sooner.
.

Termination by the employer does not have any bearing on the enforceability of a restrictive covenant, I'm afraid. The sole test is whether it is an unreasonable restraint of trade. This relates only to the terms of the covenant and rests on two tests - period of time it is enforced for, and geographical "coverage". So six months for the entire country would be unreasonable unless you happened to be highly paid and very specialised. Six months within a three mile radius is actually very tightly drawn and hence likely to be enforceable. And thinking about it - the very specific and tight terms indicate that the employer knows that. In which case I would guess that they also tend to use it.

Treacle1983

specific wording:
you will not alone or jointly, directly or indirectly carry on or be engaged in any activity or business which shall be in competiton with the business of the company for a period of six months after your date of leaving the company.

you will not work within a 3 mile radius of the office where you last worked or any office where you worked for any period of at least six months in the last twelve months of your employment with the company.

to clarify - the job is as a business retention consultant working in household insurance for an insurance broker.

can I reasonably request the meeting be postponed until i get legal advice?

Does anyone know of any free solicitors etc? Or should I just go to CAB? Didn't know if they would have the answers for something like this as it's quite specialised.

Treacle1983

Treacle1983 wrote: »

specific wording:
you will not alone or jointly, directly or indirectly carry on or be engaged in any activity or business which shall be in competiton with the business of the company for a period of six months after your date of leaving the company.

you will not work within a 3 mile radius of the office where you last worked or any office where you worked for any period of at least six months in the last twelve months of your employment with the company.

to clarify - the job is as a business retention consultant working in household insurance for an insurance broker.

can I reasonably request the meeting be postponed until i get legal advice?

Does anyone know of any free solicitors etc? Or should I just go to CAB? Didn't know if they would have the answers for something like this as it's quite specialised.

Thing is due to my disability I can only work in my local area - Should I get something from the jobcentre to give my current employer advising of this. As last time I was on job seekers I had to have the usual job hunters agreement changed as I can't travel far! So they will have on record. Current employer is a 5 minutes walk from my house.

SarEl

You aren't going to get free legal advice on this one - no lawyer is going to be daft enough to tell you the answer and let you walk away without a bill. Free legal advice is restricted to "cases" and this isn't a case - it's a legal opinion. Which, by the way, is what you have got - from me. And no lawyer, solicitor or barrister, will tell you any different - there is a good chance that this clause is enforceable, but anyone who tells you it definitely isn't is being unrealistic - the only test of it is to take it to court which will be a very costly (even if the employer sues you - you will end up with a legal bill at least) way to find out.

You can certainly try to negotiate the term, but if they refuse you only option would be to try it on and see what they do. But in reality, they probably wouldn't need to take it to court. If you breach the term they will, I would suggest, write to your new employer threatening to sue you and them. The fastest way for the new employer to resolve that would be to dismiss you. Without 12 months employment you could be dismissed without any real risk to them.