Employment contract - can't work for Rival company?

GeenyWeeny

I'm currently in full time permanent employment. However I have seen an identical job which is so close to my house that I will effectively be giving myself an extra £200 p/m income which would otherwise be spent on petrol.

My contract states i cannot work for a rival company if I leave.

Is this really enforceable? How can they control who I work for?

Thanks for your help!

sweaty_betty

Hi there - I wouldn't have thought this is enforceable. How could they penalise you if you no longer work for them??

The only thing I can imagine them doing is putting you on immediate gardening leave the moment you hand in your notice (if you were to be offered a job with a competitor) for the duration of your notice period (although to be honest, I'd have thought that if you were going to make a list of contact details of customers or copies of information (which is presumably why they'd want you off the premises) then you'd do that before you handed in your notice...)

I'm sure someone who knows more about this than me will be along to put your mind at rest.

jfh7gwa

There must be a time period stipulated in the contract, otherwise employees would burn the local employer market out within a few short years. Is it six months or something?

I've only ever worked in 1 place which had something similar in the contract, and whether legal action was taken (so told to me by a supervisor) depended on

a) the circumstances surrounding the staff exit (resigning after a year or two of service would be totally fine, being given the ultimatum of resigning or being fired after being found to be stealing office supplies probably wouldn't be)

b) the exact details of the competitor. My contract at the time specified that I couldn't work for any company in the same industry for six months after leaving (so, let's say the healthcare sales industry), but in reality my supervisor said it wouldn't be a problem unless I'd went to a competitor that covered the same product range as them, in the same city as them, etc. This was a verbal comment and I wouldn't have been able to prove it had been said if it ever came up in a court case though.

Whether you can/should try and get the new job depends on:
- how likely they are to sue you I guess? (how long have you worked there, are you just a nameless cog or do you know your CEO)
- how much you really want the new job (for £200 a month more is it worth the reputation/financial risk)
- whether you could negotiate the job start in a more acceptable manner e.g. if your contract states no rivals within 3 months of leaving, but your notice period is 1 month, just explain this at your interview and say your availability is 3 months. see what your future employers say. or else if it's a longer lock in period, say a 6 months or a year, you'd have no choice if you wanted to do it legit other than taking a short industry break I guess?

System

It would only be enforceable if there was a time limit E.G. 3 or 6 months.

Some examples upheld

In the case of Thomas -v- Farr plc, the Court of Appeal upheld a 12 month non-compete clause for a managing director, on the basis that the employer had a legitimate business reason to protect commercially sensitive information that was not client specific and could not therefore be protected by a non solicitation or non dealing clause. Effectively this meant Mr Thomas could not pursue his career in his chosen area of expertise for a year. Again, in the case of TFS Derivatives -v- Morgan, involving a derivatives trader who had moved to a competitor for a better salary, the Court accepted that TFS Derivatives were entitled to prevent him from working with a rival financial house for a certain period of time, as it protected the legitimate business interests of TFS.

OK, these are high fliers but the principle is sound no matter how menial the job.

MrSnuggles

Simply don't tell your current employer your real reason for leaving? The competing company will understand if you can't provide a reference.

jfh7gwa

MrSnuggles wrote: »

Simply don't tell your current employer your real reason for leaving?

This would be virtually impossible to cover up in my industry, and I'd assumed for quite a few others? (if you're working in the same area, anyway - clearly if you're moving counties or something the network of your colleagues is going to be more favourable towards this)

MrSnuggles wrote: »

The competing company will understand if you can't provide a reference.

Again, that would be very unlikely in my experience. But then the OP didn't mention what they do for a job, so I'm quite happy to acknowledge that it might be different for different sectors, there's such a wide variety of cultures/norms out there.

GeenyWeeny

Thanks for the replies!

I work in the fire and security industry. I don't really know any info that could be used against the company and i'm not the kind of person who would divulge such info if i did have it.

I understand they want to protect themselves.

The clause in the contract is extremely 'wordy' probably on purpose to cause confusion. It mentions 12 months and 24 months and not within a 40 mile radius.

I don't think it's worth risking. They will lose me as an employee anyway as I am looking for another job whether it's in the same industry or not.

MrSnuggles

If you're working in an office and there's not much chance of your rival walking in to find out you're there, take the job. If you have to walk around in the town with your uniform on then don't.

getmore4less

You have to look at exactly what it says to see if it would be enforceable.

Just because it has time and distance does not make it enforceable it still has to be reasonable.


The problem is,

Will the new employer back you up, because any attempt to enforce the terms will most likely include them and they may just say stuff this and terminate your employment.

unsure

I worked in a company where a fairly senior management guy left to work for a rival despite a contractual clause forbidding such action. Our boss was furious and wanted to go after him. However, when they got the company lawyers in their advice was that the company could only recover any financial losses made as a direct result of the move from the new employer. They would have to prove that they'd lost out financially (tricky to do) and it was likely to cost more to go to court than could ever be recovered.
They decided not to pursue him.

MrSnuggles

unsure wrote: »

I worked in a company where a fairly senior management guy left to work for a rival despite a contractual clause forbidding such action. Our boss was furious and wanted to go after him. However, when they got the company lawyers in their advice was that the company could only recover any financial losses made as a direct result of the move from the new employer. They would have to prove that they'd lost out financially (tricky to do) and it was likely to cost more to go to court than could ever be recovered.
They decided not to pursue him.

In other words go for the job lol. Just don't try to steal the same customer your current employer is going for and you'll be fine.