Non compete clause(9 Posts)
I'd really appreciate some advice from any HR /lawyer types on the subject of non-compete clauses in a employment contract. DP has one that has a six month duration that will basically mean he cannot work in this period. Surely that cannot be enforceable? He is desperate to change jobs but feels stuck as we can't afford for him not to be working. Thanks in advance.
I have them (binding out clauses) in my contracts, they need to be fair and not prevent someone earning a living. Mine are if employed for over two years you are not able to work for another similar business within 8 miles ( area clients are drawn from) in 1 year. My HR specialists advised that if they are to broad they are not enforceable in court, but you may need specific legal advice.
iirc from questioning this in a contract, if there is no conflict of interest you should be OK. But that will depend on the work he is going to. If, say, he was a sales manager for MacDonald's, moving to Burger King in the same geographic area may cause an issue, but M&S should be OK, as limited (I would think) conflict.
Six months is normally a reasonable length of time, but whether it is a reasonable restriction to make at all will depend on the exact wording and on the individual circumstances; what job it is, the industry specifics etc etc
As well as whether it would be enforceable, it's also worth considering whether they'd actually bother enforcing it. If they wouldn't suffer any financial loss they may not bother as trying to enforce it would incur costs for them. If they will lose money from it they may take action.
Your DH needs to seek advice on his particular circumstances.
Just wondering what the geographical restriction is.
Thanks so much everyone. There isn't a geographical restriction. Dh's job is very industry specific so we're looking at him doing some basic temping if he's held by the contract. His company also have a history of not being the most ethical employers around so there's a very real chance they won't pay him properly for his notice period too. He was tupe'd over from a much better company which bought his department and has been miserable ever since.
If they don't pay him properly in his notice period then it is highly unlikely that they will take legal action. Courts take a very dim view of litigants who have behaved unethically.
Generally though, you would need to look at the size of salary first. Is he very highly paid? If he is only earning an average salary then a 6 month blanket ban with no restrictions is unenforceable.
Then, is the ban in place to protect business interests (eg, contracts being arranged but as yet unsigned and capable of being hijacked) or is it to stifle opposition (eg trying to prevent the other company gaining experts in the field)? If the former, then it can be legitimate, if the latter then it is not.
The lack of geographical restriction together with other comments make it sound potentially unreasonable. Abiding by the terms should not mean that your dp will be deprived of all opportunity to work doing something similar.
The problem with restraint of trade clauses is that there is that no one can guatantee whether they are legal and whether the employer would take action if your DH breached it.
If I was your DH I'd take the contract to a solicitor to assess. Restraint of trade clauses are impossible to assess unless the clause as a whole and connecting clauses are reviewed. The solicitor is unlikely to be able to say with any certainty whether it's enforceable but at least your DH can weigh up his options.
As a general rule restraint of trade clauses are legal but they are very industry and job specific, there is no one sample clause that employers can use.
I have represented many employees who have breached clauses whose employers have issued legal proceedings against them. I'm afraid it does happen.
Join the discussion
Please login first.