Legal Issues with Contacting Old Customers

Tripledrop

Hi all,

A friend of mine recently left his job as a salesman for a healthcare-related IT software company, and joined a similar company.

He has received a letter from the old company's solicitor, advising that he is not allowed to contact any customers of the old company, and requiring him (and his new company) to sign a letter agreeing to this otherwise legal action will follow.

My friend has (and probably will) contact old customers, but not using any knowledge or data from the old company, but because all customers are listed on public websites like the CQC (Care Quality Commission) etc., so publically available. He is not using anything from the old company, didn't take any data with him, and does not mention them.

Are they allowed to do this to him?

I had a feeling that any term that restricts future jobs is unenforceable in court, but I'm no expert so would appreciate some advice if possible?

A little extra info:

The old company is the market-leader in this secotr, so it would be near-impossible to work for any other company in the same sector without overlapping customers.

Cheers

TD

YouAsked

Tripledrop wrote: »

Hi all,

A friend of mine recently left his job as a salesman for a healthcare-related IT software company, and joined a similar company.

He has received a letter from the old company's solicitor, advising that he is not allowed to contact any customers of the old company, and requiring him (and his new company) to sign a letter agreeing to this otherwise legal action will follow.

My friend has (and probably will) contact old customers, but not using any knowledge or data from the old company, but because all customers are listed on public websites like the CQC (Care Quality Commission) etc., so publically available. He is not using anything from the old company, didn't take any data with him, and does not mention them.

Are they allowed to do this to him?

I had a feeling that any term that restricts future jobs is unenforceable in court, but I'm no expert so would appreciate some advice if possible?

Cheers

TD

Tell him to check his contract. Some have restrictive covenants in specifically to that effect, but they would include a defined period too. If they're sending him a letter to sign after he's left employment then it sounds as if they've realised too late that there was no such restrictive covenant in his contract and I'd ignore it. It sounds like he won't need a reference from them to secure his new job either as he's already started.

Stevie_Palimo

It would depend on his contract with them I would presume and this could either be a case of hot air or they may have something he has agreed to when he worked for them in which case he could have a bit of bother, He would need to go through his contract that he had whilst with the Company in question.

Tripledrop

Wow, really quick responses, thanks!

Yes the contract does state he cannot contact customers for 6 months (just as mine did - I left at the same time as him for a different competitor).

The contract also states you cannot work for a competitor for the same period I believe, but I was lead to understand this sort of term (which restricts future employment) was an unfair contract term and unenforceable.

"Such 'restraint of trade' clauses will only be upheld in law if they can be shown to be reasonable (i.e. in duration and scope) in terms of protecting legitimate business interests and to be in the public interest."

YouAsked

Did he mention to his new employer that he had such a restrictive covenant in his contract with his former employer?

In my experience, six month period is within the realm of reasonable - particularly for commercially sensitive operations. I'm not sure it matters that contact details are publicly available for the companies he may contact, or that he hasn't taken any files with him - the former employer will know he stores information in his head which he can now use to give his new company a commercial advantage.

Tripledrop

No he didn't mention it. I'm a little worried as I am in the same position, I didn't mention that to my new employer either, and am contacting old customers too. Without the ability to do this, we would both be out of work.

The market is relatively small, and it is unavoidable in this industry.

I am a member of a union, so I have requested advice there too.

Undervalued

Tripledrop wrote: »

Hi all,

A friend of mine recently left his job as a salesman for a healthcare-related IT software company, and joined a similar company.

He has received a letter from the old company's solicitor, advising that he is not allowed to contact any customers of the old company, and requiring him (and his new company) to sign a letter agreeing to this otherwise legal action will follow.

My friend has (and probably will) contact old customers, but not using any knowledge or data from the old company, but because all customers are listed on public websites like the CQC (Care Quality Commission) etc., so publically available. He is not using anything from the old company, didn't take any data with him, and does not mention them.

Are they allowed to do this to him?

I had a feeling that any term that restricts future jobs is unenforceable in court, but I'm no expert so would appreciate some advice if possible?

A little extra info:

The old company is the market-leader in this secotr, so it would be near-impossible to work for any other company in the same sector without overlapping customers.

Cheers

TD

That is a big simplification of what can be a complex area. If he wants to dispute that, particularly as the previous employer has already got a solicitor involved, he needs to get some specialist advice.

Tripledrop

Yeah I've advised him to do this, but he only has until Monday to respond, and he's not got a lot of money for legal advice etc.

getmore4less

He will be covered by contractual terms, if they plan to take legal action which clauses will they be using.

Not signing something won't be the grounds for a case it will be something already contractual

They have said this will be a joint action so the new company is the one with the problem and their simple solution is dismiss if they don't want to get involved.

YouAsked

Tripledrop wrote: »

Yeah I've advised him to do this, but he only has until Monday to respond, and he's not got a lot of money for legal advice etc.

How has his new employer taken the letter? Possibly the employer might "fight the battle" on his behalf?

agrinnall

YouAsked wrote: »

How has his new employer taken the letter? Possibly the employer might "fight the battle" on his behalf?

They might, but I would think that gm4l's scenario is much more likely.

OP, if you want to work in the same industry within the timescale of the restriction you might have to look for a job that is geographically remote from the location of your old employer so that they can't argue that you are impacting on their business.