Need advice on a restrictive covenant in my contract

[sue0503]

Work part time, not management, not earning high salary, want to leave for a competitor, restrictive covenant says I can't within a 5 mile radius but has no time time limit i.e. 6-12 months, competitor is within 5 miles
Totally understand why these restrictions are put in place,,, wondering if no time limit specified is it still enforceable?

Probably not, that would likely fall under unfair terms.

Restrictive covenants are only enforceable if an employer can prove that it would be to the detriment of their business. You can't prevent someone earning a living.

A lower level employee with no access to sensitive data or the means to poach customers can't usually be subject.

www.citizensadvice.org.uk/work/leaving-a-job/resigning/if-your-employer-says-you-cant-work-for-a-competitor/

Thanks it would be detrimental to current employer as some of my clients would likely follow me to new job but I work 20 hours pw so I don't bring in thousands of pounds a month but it's a small company so they could still argue that me leaving would cause them loss of earnings, how much does it cost to take someone to court?
I'm trying to weigh up whether it would be worth their while?

Could you point out to your employer the risk of the clause getting struck down (due to it being indefinite in duration) and try and negotiate with them to agree something you can both live with?

Wonder if you could tell current clients they can't come with you for 12 months or something?

As a general rule, the narrower the terms of a restrictive covenant the more enforceable it is. 5 miles is a very narrow restriction so is very likely to be reasonable. No time limit is less likely to be reasonable, however. But you're not actually challenging that bit are you? The reality is they are far more likely to pursue it if you go straight from your current employer to the competitor than if you went somewhere else first.

Whether it's worth them pursuing will depend on what their financial loss would be really.

Or you could promise your employer that you won't approach former clients but that if they approach you, that's OK?

Check your contract to see if there's anything covering non-solicitation of customers/colleagues as a post termination restriction in addition to non-compete. They can't stop you taking another job, but they could reasonably enforce a clause to stop you taking customers. Not uncommon for people in sales roles to be placed on gardening leave immediately after resignation to try to prevent this from happening.

If the non compete was held to be unreasonable would a court strike it out altogether or replace it with a reasonable clause e.g. X months? Does anyone know?

They wouldn't replace it with more reasonable wording. That's why each element of a restrictive covenant is drafted separately so that if one part gets struck out the rest stands.

I think it will fail as unreasonable because by having no time limit suggests always so would definitely be unreasonable and the clause struck out.

Ignore the covenant. If they try to rely on it tell them its unenforceable.

"I think it will fail as unreasonable because by having no time limit suggests always so would definitely be unreasonable and the clause struck out."

Quite possibly. But presumably neither the OP nor her employer want things to get as far as to find that out. OP you need to have a think about how much money your employer stands to lose, what their normal appetite for risk is, and what the likelihood is of them pursuing this based on your knowledge of their personality. They'd need to instruct a solicitor and incur fees, but if they'll lose a significant amount they'd probably at least write some threatening letters, which can be quite uncomfortable and intimidating if you can't/don't want to pay for your own legal advice. But if you're set on this job it might be worth it. Have you shown the clause to your prospective new employer?

Thanks everyone
Current employer has made threat that anyone who attempts to go to this particular competitor that they will take legal action but I have no idea if it is just that, a threat
I'm almost certain I will be taking the job, I have been to CAB and spoken to legal expert, her words were that she was 'almost certain' they would be unsuccessful in winning a case, but that doesn't mean they won't try'
They only way I'll know is if I actually go I suppose, I'm not feeling good about handing my notice in either, it will not be pleasant! Current boss known for taking resignations very personally

Have you asked new employer if they are aware of any employees who joined their company being taken to court by your existing employer?

Your new employer will know you have come from their competitor, so what they can do is assign you to projects and activities that don't involve direct contact with the competitors customer-base, at least in the near term.

Then let the dust settle and see what happens in the coming months. The fuss, if any, will die down.

In case of a court action, you could justify that reasonable steps were taken to avoid direct encroachment onto the old company's 'patch'

Have you asked new employer if they are aware of any employees who joined their company being taken to court by your existing employer?.

Asking that sort of question could put ideas into the new employer's head not to touch the OP with a 10 foot barge pole

People move jobs to nearby competitors all the time. At 20 hrs a week and not highly paid there is just no chance they will pursue this! It's an empty threat. What exactly can they prove you have done that is detrimental to their business if you have not openly campaigned for customers to go with you? If they prefer to work with you, they make that choice. Your former employer could do something to keep their customers if they wished so it's up to them to get working on it. My DH has lost staff to competitors but he just lets them go. No shortage of work ever came of losing the odd member of staff. It's very expensive to sue for damages and virtually no chance of success. It's almost laughable.

Take the job and go with a clear conscience. Your current employer sounds paranoid!

CAB advice was spot on. I think it's certain that the restriction would be unenforceable if there's no time limit. And the five miles might also be difficult for them : depends on context, location and industry. You can't predict how your current employer would react though, they might try to pursue their position although more likely to send some warning letters and stop at that.

I would make sure that your new employer sees the restriction. Also, are you sure there aren't other restrictions on dealing with customers, etc

The huge problem with such restrictions is that they have to be enforceable or they are toothless. The current company would have to suffer a loss. This is why even time limited restraints fail let alone distance. You have to prove a loss and be prepared to recover it. That costs effort, time and legal fees.

Therefore, for a lower level of employee it is just not enforceable because it isn't worth it. Generally, the original employer would go and see their customers to ensure business stays with them. At the end of the day, do businesses make decisions on whether a part time lower paid employee is at company A or company B? Highly unlikely.

To put this into context, some ex employees of DH set up a new company about 15 miles away. They used photos of work they had been involved with (as employees) when with DH on their web site and named the clients as theirs. They received a strongly worded solicitor's letter and instruction to take the pictures and details of the clients down . They did and no court case ensued. The designs, pictures and clients were nothing to do with their new company. The distance and when the company was set up had nothing to do with it. Using your former company's pictures, work and clients and saying they are yours is not acceptable. The clients never did move to them and were criss aboutvthe cheek if it.

I would mention the 5 mile clause to your new employer but I cannot imagine they will lose sleep over it. Neither should you but don't actively poach former clients. Your former explorer could ask you not to say where you are going - like hairdressers do!