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Non Compete Clause and Employment Law help please

10 replies

Gapants · 04/12/2011 19:54

Ok, this is on behalf of my DH, he/we really need some employment law advice. He has a non-compete clause in his contract, we need to know, given his back story (details to follow) do they have a right to enforce the non-compete clause which states that I can?t work for a competitor for 3 months? And, if I just ignored it, would they realistically pursue it?

So MR GAPANTS writes--
For the past 6 months or so during PDPs (Personal Development Plans) my boss has been informing me that she thinks that there are things going on in the business that might involve movement/promotion for me. She said that I should try to hand over some work to colleagues, so that I would be more easily moved to a new position. At my most recent PDP she implied that she didn?t know whether anything would materialise when I pushed to be able to speak to the CEO or directors about their plans for me. She then advised that it might be a good time to look for an external job to use as leverage with my current employers.

This I did, I found a job advertised and got put forward for interview. I informed my boss of this and she said it sounded like a good job, but I was still keen to stay with my current employers.

When I got offered the position with the company I had interviewed with I spoke to my boss. She said I should take it, but as my current employers have a bonus scheme which would mean I would miss out on my bonus payment in March, I didn?t think I could make the sums add up - my wife goes to statutory maternity pay in April, so I need the bonus to see us through. I informed my recruiter that I was finding it difficult to make the sums add up, and she went back to the new company to see if they could move on salary or an up front payment.

My boss then called and said that she could pay me the bonus if I accepted the new job as she thought I had earnt it. She told me that she had had the offer authorised by a director. I relayed this information to my recruiter, who in turn told the new company. They informed us that there was now another candidate who they were waiting to interview. I informed by boss, so she withdrew her offer.

Next the new company asked me to do a psychometric test, which I completed. The following week I was offered the job once again, which I accepted once I received the offer letter. The messing about by my boss left me with no choice but to accept the position - the new job is a good one and the new company a really good one, but my loyalty still really lay with the old company.

I handed in my resignation, told my boss that I was regretful but gave my reasons, which she accepted. She said she would check whether she could renegotiate my bonus but wasn?t hopeful.

This week I have been handing over my accounts, and today I went in to the office to meet my boss. She brought the Director of HR in, and they told me I was being placed on immediate Garden Leave, which was great. They took my laptop and phone on the spot and then showed me my contract. I have a non-compete clause in my contract and they told me that they are going to enforce it. That would mean I can?t start the new job until 3 months after my 2 months of Garden Leave as the new company are in competition. Whilst I accept that this clause exists to protect the business, there are also clauses which state that I can?t deal with any of my current customers for 3 months which I think offer enough protection.

Bearing in mind only a few weeks ago they were actively encouraging my to leave by telling me that I could receive a bonus payment despite leaving, do they have a right to enforce the non-compete clause which states that I can?t work for a competitor for 3 months? And, if I just ignored it, would they realistically pursue it?

OP posts:
Gapants · 05/12/2011 08:24

Bumping, anyone?

OP posts:
mranchovy · 06/12/2011 00:56

Well IANALB it looks like noone else is going to help so in brief:

If you breach the non-compete clause they have a right to bring an action for breach of contract; they could seek an injunction preventing your DH from working in the other job and/or damages for loss of profits.

If there is a non-solicitation clause as well, a court should take this into account (as if you do not breach the non-solicitation clause then they are unlikely to suffer any loss), but you would need good representation to argue your case.

They could make this difficult and costly for you, and you would probably need support from your new employer to see you through.

You are in a much better position to judge how far they would go with this.

Possible courses of action for you:

  • asking nicely for the condition to be waived, or
  • complaining about how you have been unfairly 'counselled out' amounting to constructive dismissal
  • working from home answering the 'odd telephone call' from the new employer, perhaps with a golden handshake after 3 months which happens to equal 3 months pay
mranchovy · 06/12/2011 01:08

oops, in the last bit meant to say

  • complaining about how you have been unfairly 'counselled out' amounting to constructive dismissal, but it would be a lot easier for all concerned and avoid enriching lawyers if you could all come to a sensible agreement about joining your new employer OR
  • working from home...
Gapants · 06/12/2011 21:46

mranchovy Thank you so much for your message. We are waiting it out for a day or so to see what his current (kind of) employer says and if they will waive the clause or negotiate it down in some way. We are hopeful this will be the case.

We do have free legal cover on our home insurance and very fortunately we have just found out a friend of a very good friend is an Employment Solicitor, so we can get good reliable advice from them if we need to.

Sorry, would you clarify IANALB means?

Would it be worth sending a strongly worded email to them from a law firm?

OP posts:
MrAnchovy · 07/12/2011 00:41

sorry - I Am Not A Lawyer But

I don't think a pre-emptive attack is going to help at this stage - what would you say - 'I am about to breach my contract by going to work for X Ltd but don't even think about trying for an injunction otherwise I will sue for constructive dismissal'? If they were planning to sue that's not going to put them off, if they weren't before they might now, and everybody knows that they can afford to spend more on legal fees than you can.

Keep your powder dry - as I say most people in this situation will come to some arrangement with the new employer.

Gapants · 07/12/2011 10:00

Ah, ok thanks!

Yes you are right, that makes sense. Thank you. Very much feeling like we are limbo, it is frustrating feeling so impotent.

OP posts:
CaroleService · 07/12/2011 10:09

That clause sounds a bit restrictive to me.. wonder if it would stand up? But I am most definitely not a lawyer.

If I were you I would start a thread called "Flowery Bean-Bag - please please help" in Chat. Flowery is Mumsnet legend, and knows her employment stuff.

Gapants · 07/12/2011 12:10

Thank you for the tip, will do!

OP posts:
ElphabaisWicked · 07/12/2011 12:31

I am not a lawyer but there is something about non compete clauses whereby you can not be prevented from earning a living. How it is enforced depends on seniority but I think you defintaly need to take legal advice.

nocake · 10/12/2011 21:49

DW's ex-employer tried, and failed, to enforce a non-compete clause on a colleague of hers. The company she moved to offered to defend any action on her behalf but the ex-employer backed off. I don't know the reasons but it isn't clear that non-compete clauses can be enforced.

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