My contract says I must not work for a competitor

catflapuk

Hi there,

I am thinking of leaving my current job and encounter a slight problem: my contract says that I must not work for a competitor within 6 months of leaving my company.

1) Is such a clause reasonable or can I ignore it and work for whoever I like ? I feel this clause limits my opportunity significantly to find different employment . Also, I joined this company through an acquisition. We were given new contracts shortly after the acquisition and my initial contract when I first started this job did not have such a clause. I signed the new contract anyway.

2) It is not stated which companies are considered as competitors.

3) Do I have to tell my boss/company who the new job is with if they ask ?

4) What action can my company take if I (in their view) join a competitor ?

I appreciate any help

gjb1503

hi,
I'm no expert but took advice about this same issue from a HR expert in my family when my boyfriend started a new job with the same thing in his contract.

The answer we got then was that it is a standard contract clause that lots of companies include but that they would only enforce it for someone who had lots of influence in their chosen field and who could significantly affect profits if they moved to a rival company.

so I guess it depends on your job role and how important you are !

This was only informal advice given to us though but hope it helps a bit.

Owain_Moneysaver

Courts are very reticent to enforce contracts in restraint of trade - you have a right to earn a living.

If the contract has no restriction on distance then it's likely the court would strike it out as unfair and unreasonable and would refuse to enforce it.

What is reasonable depends on your position, responsibilities, the industry in which you work and where your competitors are.

Your employer would sue you to recover their losses, which they would have to demonstrate result from you being in breach of the restraint.

steampowered

These clauses are only enforced if the employer has a legitimate interest to protect, and the protection is no more than is reasonable. It must be reasonable in scope, period and geographic area.

A clause telling you not to work for competitors is pretty restrictive and six-months is at the top end of what is normally enforceable. The employer would need good reason for having it. It might be enforceable if you are a senior employee who has a lot of confidential information about the company and its customers, otherwise it probably won't be enforceable.

If the employer wanted to enforce they could sue you for damages or for an injunction stopping you from doing certain things. This is expensive so the employer wouldn't bother unless it has a good reason.

scooby088

I had the same clause in my contract, I moved to a competitor but I was a shopfloor worker and had no idea of contracts to who we supplied, so basically the clause was mute as I had no idea of any sensitive information.

ohreally

http://www.glovers.co.uk/news_article273.html

emsywoo123

I had a restrictive covenant "apparently" in my contract (not in the one I signed, it materialised later but hey ho!)

It did not mention any distance, therefore (having taken legal advice) I carried on as I was! But ex employer did get *very* threatening......

catflapuk

Hello,

just wanted to say thanks for your responses. I had forgotten my login details, hence the late reply. I appreciate your thoughts. I have decided to go with whatever job and comany I like and not care about my contract.

dizzyrascal

Of course, if you work for a very niche industry or one where you are well known, everyone will know what you did and you might get a bad name for yourself. If you work on the bottom rung of a global brand name it won't matter so much.
Also, if you start approaching clients that can reflect very badly on you too.
If you're not worried about your reputation then carry on.
Just don't be surprised if one day someone does the same to you.

Hezzawithkids

I've yet to encounter an employer who didn't have this clause in their contract. I work in a very competitive industry and people move from one player to another all the time. Depending on your level of seniority you may be asked to take 'garden leave' i.e leave the building as soon as you've handed in your notice then get between 1-3 months paid leave before your start your new job. You may also have a Non-Disclosure (NDA) clause in your contract so check that too.

Bigmoney2

If you do (in the future) resign to take up a position with a competitor expect to be asked to clear your desk and be escorted off the site imediatley.