This is a Premium feature
To use this feature subscribe to Mumsnet Premium - get first access to new features see fewer ads, and support Mumsnet.Start using Mumsnet Premium
Non compete clauses(7 Posts)
I am thinking of applying for a job with a direct competitor to my current company. However my contract has a non compete clause saying I can't work for any business 'which is of the same or similar type' to my employer for 12 months. Is this likely to be enforceable? 12 months seems excessively long to me. The clause does not specify any geographical restrictions, which is probably reasonable as I work in IT.
For reference I am a mid level employee, I am not a manager or a senior member of staff. I do not deal with clients or customers, I work on technical projects for my employer.
Hmm. 12 months is high, yes, and depending on your role, might be excessive and therefore unenforceable.
Basically they cannot prevent you reasonably earning a living. Can you do what you do for a company that isn't of a similar type?
Is the business genuinely likely to suffer a loss if you go to a competitor?
Can you do what you do for a company that isn't of a similar type? Yes I can.
Is the business genuinely likely to suffer a loss if you go to a competitor? Only in terms of the inconvenience of replacing me. They won't lose any business / contacts as a consequence of me leaving.
Restrictive covenants like this are rarely enforceable unless in a client facing business / role.
Unless there are tech secrets to be shared?!
Lol I haven't been involved in cutting edge development!
I rang the legal helpline on ny house insurance about this several years ago as like you it just felt like they were being incredibly restrictive and unreasonable in not letting me change jobs to do something similar for a year - were they expecting me to work at Tesco for a year and lose my skills? Or to have saved enough to live on? They certainly weren’t offering to fund the year of no work. And at the time the field I worked in within IT and product development was incredibly small so to go and do the same thing anywhere would have been seen as a direct competitor (luckily the field has increased exponentially in the intervening time so shouldn’t be such an issue now).
The advice I received at the time was that the longer the clause in your contract the better as that would be seen to be unreasonable to support yourself out of your field for 6 or more months (wasn’t at a senior grade) whereas potentially they could argue that a month or two was reasonable to enable them to embed your replacement in, particularly if you dealt with external clients.
They also said to look at their practices when employing someone - would they be happy to advertise a normal level job and wait a year for the person after they had been recruited if that person had twiddled their thumbs for a year? Or would they expect to wait for normal notice period of a month or two?
If you have legal cover through ibsurance/bank/union etc might be worth giving them a call for up to date advice and see if they can give you a sentence to use if challenged to make them realise that it’s not enforceable and they’re not scaring you by saying it is as you know you’re in the right.
Ok so it sounds as though the restriction isn’t unreasonable preventing you from earning a living, but it may well be excessive and not strictly necessary/justified to protect genuine business interests, which would mean it wouldn’t be unlikely to be enforceable.
Your practical considerations are:
1. Are they likely to try and enforce it? You don’t really want to have to go to court to fight this. Do you know if they generally enforce it?
2. Is the potential new employer going to be prepared to risk possibly getting involved in a legal battle/ defending a claim that they interfered in a third party contract? They may prefer to stay clear.
It’s probably unlikely they’ll bother trying to enforce it and it’s fairly likely that if they do try, they won’t succeed, so it’s a question of whether you’re willing to test that or not.