Can anyone help with my dh's new contract terms

[Prufrock]

The company dh works for has been sold, to a very large, multinational. The deal was sold to the key employees as one which would leave things very much as they are, but it now transpires that whilst the investors are being left to carry on as before, the sales team (including dh) is being integrated into the big global company, which changes things considerably for dh.

He is unsure as to whether he wants to stay under new regime, but there are a couple of worrying things in the contract he has to sign soon. New Co. has a clause forbidding employees from soliciting and accepting orders from existing customers, seemingly for an indefinite period after leaving the firm. As my dh's existing customers comprise pretty much everyone in the city who has money to invest this would effectively leave him unable to do his job - surely it's unenforceable?

And if it is enforceable for a 6 or 12 month period of gardening leave, does anybody know if the wages he would have to be paid during that enforced leave would be only his basic (which is comparitively low) or would it include expected bonuses (which can be up to 3 times his basic)

He will also be due a considerable compensation payment for the loss of benefits in the new contract (pension contibutions are much lower, loss of car allowance/significantly reduced level of bonus earnings etc) New. Co. are suggesting that this would not be paid for another year - are they allowed to do this and effectively not pay him for the enforced loss of benefits if he then decides to leave?

And if you can't answer the above questions, does anybody know a decent employment lawyer in the city? Despite his huge number of contacts in the business this is the only place we can ask because it is imperative that noody gets to kno taht sh is even considering leaving.

Please check up on everything I type, As I am not an expert.

However if he resigns after signing the contract & staying for a bit he will be stuck with the not soliciting customers (and to some extent with accepting orders) for some months. There is something called a 'right to work' which would stop this being an indefinate amount of time.

If he takes redundancy, which he should be entitled to as he a choice about who he works for then because of the same 'right to work' I think that he can start soliciting immediately.

How many people in the company are affected as if it is over 100, TUPE should give some protection. TUPE should ensure that your dh is no worse off.

CAB may be able to answer some questions, they helped me when faced with being outsourced. But for specifics you would probably need a specialist (as you already know).

Sorry I cannot be of more help.

Prufrock - I assume if he's in sales in teh City he's on a decent whack???

If so he needs to take legal advice - most of the big City firms have employment lawyers who can advise him. I would go somewhere like Linklaters or Freshfields et al and get one of their senior employment lawyers to advise him. They can negotiate on his behalf and make sure the newco are following their obligations to their new employees!

He'll have to fork out a bit on fees but unless it is really complex a few hours should do it!

Restrictive covenants in employment contracts are generally unenforceable unless they are "justifiable in the circumstances" - obviously this then depends on whether Newco has a genuine interest to protect. Again, it would probably be prudent to get specialist advice on this.

I guess it, ahem, 'depends on the circumstances' - not exactly helpful I know! The question is do they have a legitimate interest to protect eg. customers, trade secrets etc? Your dh will have to read all the clauses of the contract in detail clearly - perhaps the non-solicitation clause only prevents him poaching clients in his own name. If he subsequently became the employee of another firm and his clients defected then could he really be said to have solicited their business? It will be his new employer that accepts their business not him personally.

Aaaggh. I know Roobie without the specifics it's very difficult. I just don't see how they could enforce it for more than a year, because it would mean he could never get anotther job in city sales again. But even if they can enforce it for only a year we couldn't live (to our admittedly extravagent) current lifestyle on only his basic for a year.
I think I will have to persuade him to go see a lawyer - teh more I read the more I think he might even have a case for constructive dismissal - I mean, they have moved his bonusscheme from 8bps on gross sales to 5bps on net - that practically halves his payouts - they couldn't afford to compensate him for the next 20 years of that!

IME - most City types rely heavily on the employment lawyers when negotiating terms!

They will only ever know if there is a real problem anyway. DH can take the advice and then it is up to him whether he follows it or not. Newco need never know he's spoken to the lawyers if DH prefers it tht way!

I think you are right Prufrock - the new contract terms seem very different to the old!

he must see an employment lawyer - as soapbox says, no-one needs to know that he has and he can always choose not to involve a lawyer when he negotiates but he should at least listen to their advice and the options they come up with. I'm sure newco would be very naive if they didn't expect some involvement from employment lawyers at some stage - having worked at for a multinat that took over a smaller firm, I am sure that newco will have offered them the least they think they can get away with!

you don't need to pay Magic Circle (e.g. Linklaters or Freshfields) fees though - there are many very good lawyers in small/medium firms.

There are some recommendations here , of firms and individual lawyers. hth

that's not the page I thought I was linking, sorry - you need to scroll down to Employment, under Human Resources

Carolina - it is true - a smaller firm might do it - but TBH there is something about a Magic Circle firm that will put the wind up the opposition should it come to that

hmmm. The risk with a very big firm is that Mr Prufrock will be a tiny minnow compared with the rest of their (corporate) clients and will not get the amount of partner attention that he might at a smaller firm. His file will more likely than not be delegated to a v junior lawyer, possibly one who isn't yet qualified. Smaller firms equal better value for money, IMHO.

Conversely though, if it does come to a fight then we can assume that Newco will put up a magic circle firm and I think Mr Prufrock will be disavantaged if he puts up a small firm.

I wouldn't rule out a smaller firm, but would use one only if I knew they had someone who was regarded within the profession as a 'killer'!

Small firms have trainees and newly qualfied's too - I assume they use them too

BTW - I am not a lawyer so have no axe to grind as it were!

I agree with Carolina. I'd go to a smaller/medium-sized firm that has a good reputation for applicant work for executives (ie not one doing union work).

Well it's all moved on today - dh has talked to one of the three key guys who sold the firm (who is being left well alone to do his thing by newco) who was shocked by what was happening to dh. I think the three of them only thought about themselves and the 7 figure sums they were pocketing and are only now realising that selling out has consequences. So the Sales team are putting together the business case for not changing things, and VIP is writing to chief exec of newco on monday to say that he wants sales to stay with investors.

I thought I'd given up all this bloody office politics stuff when I left work. We have done very well out of the company sale but part fo me wishes things could just go back to how they were. I know dh will be fine - he had so many offes of other employement when the rumours started about his co. being for sale, but he has given the last 10 years to them, and I think he really does see it as part of his family - he started in a fairly lowly position and rose up throug the ranks, and keeps on ghetting upset about what he sees as newco destroying everything he has built up.

So which of those maller companies has a "killer" in employment law if mondays leter doesn't bear fruit?

Prufrock - that sounds a bit more encouraging

You could try CATing PPH - perhaps she might know someone?

unenforceable but standard / basic only (but the idea is you compensate for it when you negotiate into a new job)