Redundancy and non-compete clause

letitcomedown

I have a non-compete clause in my contract saying I can't work for another employer in same industry for 3 months after leaving this one. Now, if I changed jobs of my own volition that seems reasonable, but it seems really unfair that if I were to be made redundant through no fault of my own I wouldn't be able to seek another job in the same industry.

Would the clause be likely to be enforcable in this case, or would I need to try to get my current employer to commit to not enforce the clause?

LittleVoice

This would be an unfair contract term - preventing you from earning a living - not enforceable.

dmg24

LittleVoice wrote: »

This would be an unfair contract term - preventing you from earning a living - not enforceable.

Not necessarily, the term would be assessed on how reasonable it is considering all the circumstances. This takes into account geographic limitations, the time of the prohibition, and the role and industry in question. The fact that you were being made redundant would also be taken into account.

If, for instance, you worked in a general role in retail, and your (previous) employer prohibited you from working in any shop, this would obviously be unreasonable.

However, if you were a manager of a specialist shop, then it would be (arguably) reasonable for the previous employer to prohibit you from taking your specialist knowledge to another specialist store in the same town.

There is quite a bit of case law in this area, but without more specific details it is not possible to say what would be relevant.

Debt_Free_Chick

letitcomedown wrote: »

I have a non-compete clause in my contract saying I can't work for another employer in same industry for 3 months after leaving this one. Now, if I changed jobs of my own volition that seems reasonable, but it seems really unfair that if I were to be made redundant through no fault of my own I wouldn't be able to seek another job in the same industry.

Would the clause be likely to be enforcable in this case, or would I need to try to get my current employer to commit to not enforce the clause?

What exactly does your contract/terms say? These clauses don't usually apply in the case of redundancy. If it's a compromise agreement rather than a statutory redundancy, your solicitor should ensure that any restriction on working for the competition is "struck out" and the agreement leaves you free to work where you like.

haylibo

Non-compete clauses are notoriously difficult to enforce even for quite senior and specialised staff in such industries as advertising where it can be a very sensitive issue. It is a pain in the aristoles for an employer to go after you for non-compete. I've known one try and give up.

cazziebo

Yes, agree difficult to enforce but nevertheless restrictive covenants are enforced.

however, very unusual for it to apply within a redundancy situation - and I think it would be necessarily unfair. If they are saying the job no longer exists, then they should not be restricting your options in finding other employment. Debt FreeChick is spot on with her advice. If it is a compromise agreement make sure any non compete clause is removed.

dannymahon

Sorry to drag up an old thread, but I found this while doing some googling and was wandering if anyone out there can add to this thread specifically with my issue in mind.

I have just been made redundant from a role in which i have 3 months notice. My company is trying to hold me to a clause in my contract which states I cannot work for a competitor for 12 months.

As my role has been made redundant I do not see how they can enforce this. The sector is marketing in online gambling.

I doubt they can even enforce this for a day and therefore will try and use this as a negotiation for a bigger pay out. Do any legal bods have any advice for me before I go in all guns blazing tomorrow!

SarEl

Sorry - but I disagree with the advice previously given (and would have done at the time had I been posting here then) and it is possible that the clause could be enforced. An EAT ruling last year (forgotten the name of it without looking it up) ruled that such a clause was enforceable for six months (which was the term) afdter a redundancy. The claimant was a haulage handler at an airport site! I hasten to add that his union supported the case financially because they didn't beleive it could be enforced, and many of us in the law were frankly shocked by the decision. But decision it was. And still is. The only safe advice is that if you intend to breach the contract, then you mjust take legal advice from someone with experience of restrcutive covenants - whilst some are not enforceable, others, unfortunately, very much are. And it is an expesnive mistake to make if the employer is inclined to litigation.

dannymahon

Thanks SarEl. I have worked in the industry for 8 years since graduating from university and it is clearly the only career choice I have hence why I am taking it this seriously.

I have zero intention of breaking anything, but want to understand the ligitamacy of them actually being able to push it. At the minute I understand as to enforce it they would need to prove that me working for another company would be financially detrimental to them. I work in marketing and have no access to data or client lists so i dont see how it would. And with it being my only career choice the law would be erring on my side.

I feel my leverage and end game should be a comprimise agreement i.e. gardening leave for my 3 month notice period. And then anything after that further compensation.