Issues with Restrictive covenant.

MrINeedOfHelp

Hi all.

Just looking some advice regarding restrictive covenant.

Specifically regarding non compete clauses.

When I joined my current employer it was for an entry level, minimum wage position and of course this covenant was signed on my first day at the company it states in summary, for a period of 12 months I am unable to work for a competitor.

In my time at the business my role has changed however I have gained no senior responsibilities within the business that would allows me any additional special responsibility or more personal and intimate relationships with clients that I didn't already have when I first joined the business.

Upon being offered a new role with a new company my current employer has since attempted to enforce this covenant on me (informing of such in xmas eve) as well as sending the same letter sent to me, to my new employer.

Is there anywhere other than CAB that might be able to offer additional advice in the matter as I feel I now have the risk of new employer withdrawing and thus seeing out my notice with no new job lined up as a result?

MrINeedOfHelp

Would my old employer be within it's rights to threaten legal action against my new employer? In the letter they threaten as such but from my limited understanding, unless my new employer is found to help encourage or otherwise actively provide their own instructions to ignore the covenant would that be possible.

They have of course done no such thing and I feel as though this has been threatened with no consideration towards the matter as a way to try and scare off the competitor?

MrINeedOfHelp

Jillanddy said:

MrINeedOfHelp said:

Would my old employer be within it's rights to threaten legal action against my new employer? In the letter they threaten as such but from my limited understanding, unless my new employer is found to help encourage or otherwise actively provide their own instructions to ignore the covenant would that be possible.

They have of course done no such thing and I feel as though this has been threatened with no consideration towards the matter as a way to try and scare off the competitor?

They are certainly allowed to make any threats they want provided the threats don't break the law - and this doesn't. I'm sorry to say that I have heard of such threats working - not necessarily because the employer takes them seriously, but just because it becomes an entanglement they don't want. It's not common. But nobody could tell you that it won't happen. And I agree that it is being done to scare off the competitor - but enforceable or not, you knew you'd signed the damned thing, so why on earth did you go to a competitor, or at least without checking things out first? These covenants are not easy to enforce unless they are very tightly drawn, and have limited application - so, for example, it would be possible that one that said you can't work for a competitor within a 40 mile radius might be enforceable, but one that applied anywhere in the country almost certainly wouldn't be. And, in the end, only a court could decide what is reasonable. All that said (and please don't take this as an insult) if you are the nonentity you describe yourself as, it seems like a huge overreaction regardless of what you signed. Is there anything to the story that you are missing out? Context can be very informative! But in the end, as I said, if the new employer wanted to withdraw the offer, for any old reason they want, it is relatively easy and painless (for them) to do that. Why does your old employer think they could sway the new one?

In my case, trying to think...there is reference to a radius of 5 miles however the difference between the two employers is in the hundreds of miles (albeit I am personally not relocating) just working from home and that particular restriction is in reference to conduct restricted business of existing or prospective clients.

In terms of working for a competitor there is no reference to any geographical restrictions. Just a 12 month rule. It is understood what I signed was also the same document for everyone in the business regardless of title.

I've chosen the competitor because throughout the process I read through my contract and all other forms of available documentation to staff and couldn't find references to any restrictive covenants and had no copies at home coupled with my contract. The main reason was also the wage, whilst I was no longer in the position I was hired for over two years ago my wage had remained stagnant and unchanged despite the move and to counter the upcoming increase in costs of living decided to look elsewhere and find a better wage.

The covenants was signed over two years ago.

MrINeedOfHelp

Jillanddy said:

PS - when you speak to them could you let us know what happens. Your former employer sounds somewhat insane, so I hope it works out, and it'd be nice to know!

Without going into too much detail, they frankly are insane.

I will of course keep the forum updated on how this all moves along.

Marcon

MrINeedOfHelp said:

Would my old employer be within it's rights to threaten legal action against my new employer? In the letter they threaten as such but from my limited understanding, unless my new employer is found to help encourage or otherwise actively provide their own instructions to ignore the covenant would that be possible.

They have of course done no such thing and I feel as though this has been threatened with no consideration towards the matter as a way to try and scare off the competitor?

If your new employer is a competitor, and they have been made aware of the covenants, in some cases they only need to employ you to give themselves a headache. 

MrINeedOfHelp said:

Hi all.

Just looking some advice regarding restrictive covenant.

Specifically regarding non compete clauses.

When I joined my current employer it was for an entry level, minimum wage position and of course this covenant was signed on my first day at the company it states in summary, for a period of 12 months I am unable to work for a competitor.

In my time at the business my role has changed however I have gained no senior responsibilities within the business that would allows me any additional special responsibility or more personal and intimate relationships with clients that I didn't already have when I first joined the business.

Upon being offered a new role with a new company my current employer has since attempted to enforce this covenant on me (informing of such in xmas eve) as well as sending the same letter sent to me, to my new employer.

Is there anywhere other than CAB that might be able to offer additional advice in the matter as I feel I now have the risk of new employer withdrawing and thus seeing out my notice with no new job lined up as a result?

The CAB has some helpful comments (which you've possibly seen already): https://www.citizensadvice.org.uk/work/leaving-a-job/resigning/if-your-employer-says-you-cant-work-for-a-competitor/

Otherwise 'anywhere other' is likely to be a solicitor with a good knowledge of employment law. Without seeing the exact wording/knowing which industry you are/other relevant factors, it's impossible to comment other than to observe that what appears to be a year's ban on working for any competitor, anywhere, might be rather tricky to enforce.

MrINeedOfHelp

So I have had further updates from new employer and they have expressed to me that from their point of view nothing has changed. They still want me in and currently see no reason to change my start date.

They did find it extremely strange that they have acted in such a heavy handed manner in threatening action against them when they've done nothing at all to encourage any deliberately ignore or break any covenant.

They see this as a case (fairly I'd say) as something that is solely between myself and my current employer and just want to make sure I can offer them 100% in the same way they will be investing 100% into me.

I can not fault my new employer for asking this, they doing their own due diligence and it's only right they'd expect me to perform to my full potential.

It does lift some weight off shoulders in that sense. I just need to source legal counsel just to make sure my current employer is aware I will contest it should they not stand down.

Further updates will come as this progresses. 

MrINeedOfHelp

So it has all come to an amicable end.

They've backed off from the original threat and I had a meeting with one of the directors who I've always had a positive working relationship with and apologies for how the situation was handled were given.

It was agreed I'd be put on Garden Leave with full pay until my notice period finishes. 

For my team and my line manager, it's not how I wanted to end as some hadn't returned from annual leave, still plenty of work to have been done and I feel bad for my line manager who now has to pick up two people's job and try and balance everything.

All in all from my standpoint though it all seems to have come a positive end at least and all parties involved are happy.

Sandtree

MrINeedOfHelp said:
I feel bad for my line manager who now has to pick up two people's job and try and balance everything.

One of the joys of being a boss and ultimately their blame should be directed at the Director who made the decision to put you on garden leave 

getmore4less

Sandtree said:

MrINeedOfHelp said:
I feel bad for my line manager who now has to pick up two people's job and try and balance everything.

One of the joys of being a boss and ultimately their blame should be directed at the Director who made the decision to put you on garden leave 

given the op had

Upon being offered a new role with a new company my current employer has since attempted to enforce this covenant on me (informing of such in xmas eve) as well as sending the same letter sent to me, to my new employer.

Not clear if the director was involved in the initial escalation to a letter Xmas eve.

Wonder if this was just a sloppy attempt to get the OP to stay

Kind of backed into a corner not to have the OP back once they threw we want to protect our interest at them.

Sandtree

getmore4less said:
Wonder if this was just a sloppy attempt to get the OP to stay

Letter to new employer clearly was an attempt to get the offer retracted... if the intention/hope was the resignation was rescinded or the OP just becomes unemployed would be even more speculative.