My employer won't let me leave! Can they do that?

LondonITConsultant

I work for an IT agency  that sub-contracted me to a bank in London. I was contacted by another agency for a job at another bank. When I decided to resign, my company refuses to let me go. They say that I have anti competitive clause in my contract, which restricts me to work at any of their clients for one year. The banking industry is small and they are providing resources at almost all banks. So, that effectively means I cannot work at any bank.
Can they hold me to a clause like this? Is this legal?
On the other hand, they are willing to transfer me to the other bank that I would like to join so they can make the commission. Is that ethical?

Savvy_Sue

It's the way agencies work. Not all anti-competitive clauses are enforceable, but yours may well be. And you signed that clause, presumably. 

You need legal advice, or you suck it up. 

thebrexitunicorn

I agree that a legal opinion is the best option for understanding how enforceable the clause is likely to be. 

getmore4less

You need to get the new agency to discuss this with their client,  even if you transferred through your current agency the new one will want an introduction fee. 

The new bank get to decide who they employ as they hold the cards 

You should be working through Ltd with contract for services that refuse any restrictions on where and when you work.

Sandtree

By "agency" do you mean recruitment agency or something else?
You mention resignation which is an employment term, are you an employee of the agency? If not what is your engagement model, umbrella, ltd...?

Non-competition clauses are perfectly legal in principle and clearly the time to raise the issue was before you agreed to work with them! The courts at times however have considered some terms to be excessive and have deemed them unenforceable; what is considered excessive depends on a large number of factors such as duration, how many corporate sensitive information you have or client relationships, your alternative options for employment, renumeration etc.

I've been contracting in the FS market, including banks, for over a decade and was a perm for over a decade before that and have never seen any clauses from a recruitment agency that would prevent my working for someone else unless that particular agency had provided an introduction at some point in which case the clause would require that I pay their margin for a period of time. The only time when I've known these to kick in was with one insurance client when several agencies were kicked off the PSL but one was told that all current contracts would be terminated, the company approached the contractors and told them to sign up with a new agency to carry on their engagement and this triggered letters to both the company and contractors about the non-competition clause... I don't know the ultimate financial outcome but the company had caused the issue so took ownership of it and ultimately resolved it without losing contractors but them switching to a different agency.

Comms69

You can leave, just not to a competitor...

Undervalued

getmore4less said:

You need to get the new agency to discuss this with their client,  even if you transferred through your current agency the new one will want an introduction fee. 

The new bank get to decide who they employ as they hold the cards 

You should be working through Ltd with contract for services that refuse any restrictions on where and when you work.

Which is fine if companies will "employ" you on that basis. If they feel they can get plenty of suitable people they will dictate the terms on which employees / subcontractors are engaged. If, on the other hand, you have a rare talent then you can dictate the terms under which you will work.

TELLIT01

They can't stop you leaving your current employer but may be able to stop you taking up the other job.  You really to need a specialist employment law solicitor to determine whether or not the contract conditions are enforceable.

Sandtree

TELLIT01 said:

They can't stop you leaving your current employer but may be able to stop you taking up the other job.  You really to need a specialist employment law solicitor to determine whether or not the contract conditions are enforceable.

They cannot stop you taking the other job either but it may become a breach of contract and as such give them the right to recover losses.

PS... above may be slightly overstating it but I've never heard of an injunction being put in to stop someone from working only ever fees having to be paid etc.

Brynsam

LondonITConsultant said:

On the other hand, they are willing to transfer me to the other bank that I would like to join so they can make the commission. Is that ethical?

Sounds like a level-headed business decision on the part of your current agency - neither unlawful or unethical.

getmore4less said:

The new bank get to decide who they employ as they hold the cards 

You should be working through Ltd with contract for services that refuse any restrictions on where and when you work.

The new bank can decide all they like but could find themselves on the receiving end of a claim from your agency if they employ you, knowing that they are inducing you to breach a restrictive covenant. 

If you don't want to be bound by clauses in a contract, by all means don't sign - but be aware you are likely to find it even harder to get new work. 

Ozzuk

getmore4less said:

You need to get the new agency to discuss this with their client,  even if you transferred through your current agency the new one will want an introduction fee. 

The new bank get to decide who they employ as they hold the cards 

You should be working through Ltd with contract for services that refuse any restrictions on where and when you work.

Just one word of warning on the last point - if you do this be careful what contract you agree.  For instance, if you provide a contract via your company to provide xyz services for 6 months, and decide to leave for a better role you could be liable to still provide those services.  Theses contracts are quite common with services, the company is getting a contractual service not a person.