Non-compete clause

[Saintflop]

Wondering if anyone can share insight as to if this non-compete clause is enforceable. I don't think it is but would appreciate opinions.

4 years ago, I was in an unpaid, volunteer position for a business. At the time, I signed a contract which included a non-compete clause. This says I cannot conduct any business in a list of postcodes or set up a specific service whilst the business (not my employer - no contract of employment or employment agreement) is trading.

18 months in to this and my role changed significantly. I still work in the industry but in a different role that requires my own insurance and qualifications. I subcontract for the same company I originally volunteered for and have not conducted work using my own trading name because of the non-compete I previously signed.

An opportunity has arisen that will involve me doing some things alone, but the business owner believes I am unable to set up a business at all/offer services due to the non-compete clause.

I don't think this is enforceable as it does not take in to consideration my role change/logistics of working, it is indefinite (4 years does not seem to be a reasonable timescale and there is no specific timescale mentioned), there is no confidential information that I would 'take with me' so it is purely seeking to prevent me from using my skill set/qualifications/act as a competitor. Additionally, I am not an employee and I receive no benefits as such.

The non-compete also specifies that I can't offer very specific services within the industry. I may not choose to offer these services as the opportunity I have been presented with means I will be much busier in other areas...but the company that I subcontract for believes I can't work in the industry, at all, locally. For example...let's say the non-compete says 'saintflop cannot make wedding dress alterations within these postcodes without written consent, for as long as this company is operating'. The company owner believes that 'saintflop cannot undertake any tailoring or adjustment work whilst the company is operating. I hope this makes sense.

I want to maintain a very positive working relationship but equally can't pass up the opportunity I am being offered, so am trying to tread carefully here.

Depending on the exact wording, noncompetes are generally only enforceable for 6 months, max 12 if really carefully and specifically crafted. Geography and type of business/services need to be specific and limited.

It's not clear from your post but if you are trying to do this new business whilst remaining in the same job as currently then the contract will likely prevent you from doing so. If you are seeking to leave and do your own thing, you will be free to after 6-12 months from termination of your current contract depending on specific wording.
You will not be able to use information, data, contacts, know how etc from your existing role to perform the new role, ever, unless such info is already in the public domain.

Absolutely unenforceable, don’t worry. For several reasons. I can’t think of a circumstance in which it would ever be reasonable to enforce a restriction for an indefinite period as they are attempting to do.

No restrictive covenant is enforceable without what’s called ‘consideration’, ie you have to get something in return for agreeing the restrictions. Normally that would be a salary but you didn’t have that.

”If you are seeking to leave and do your own thing, you will be free to after 6-12 months from termination of your current contract depending on specific wording.”

Where did the 6-12 months come from? OP has stated there is no time limit on the restriction? Even if a 6-12 month restriction would have been enforceable, it doesn’t matter because that isn’t in the contract.

@herethereandeverywhere Sorry, bad information given on my part, I'm not sure I have been clear. I don't have a current contract. I freelance with no contract about my current role. Technically I 'subcontract' in terms of the working mechanisms, but there's nothing in writing relating to my current role, it was all done when I was in a volunteer position a long time ago. So I would like to stop freelancing for this one business and go it alone.

To try and clarify without outing myself entirely...

4 years ago I was a learning to be a wedding dress seamstress. 18 months ago after a few years of altering wedding dresses, I began specialising in altering designer suits. The company previously only altered wedding dresses, so I brought in a new service, which I 'freelance' for and invoice the company for the each suit I adjust (as well as invoicing for wedding dress alterations).

Now, I want to break away to set up my own suit altering business as I have a big opportunity coming up about the suits. The original wedding dress altering business believes I cannot do ANY tailoring work on any garments, ever, but the non-compete specifically says I can't adjust wedding dresses. I have never signed a contract regarding suit alteration services and we have informally agreed prices and how I would be paid for this.

I work in such a specific industry that this would be quite an outing post so this is as good a comparison as I can provide. But I have no up to date contract relating to my freelance role, agreed rates, client information, etc. The last contract that was signed related to a different set of responsibilities, roles, etc (I was responsible for very little as I was essentially the person that watched and made tea, I'm now a highly qualified 'asset'...without me being contracted in as a true asset).

Information on how to do the job I will be going to do is in the public domain and I have undertaken my own qualifications, have my own insurance, certifications, and so on. I will not be using any 'company knowledge'.

Thank-you for your replies, I am breathing a bit of a sigh of relief.

No restrictive covenant is enforceable without what’s called ‘consideration’, ie you have to get something in return for agreeing the restrictions. Normally that would be a salary but you didn’t have that.

Ok great. Am I right in thinking that if the business attempted to enforce it, they could find themself in hot water trying to treat me as an employee, but without any of the 'perks'? No sick pay, no holiday entitlement, no salary, no guaranteed work...but asking me not to try and go it alone if they don't provide me with work, effectively.

Fortunately things have always gone really well financially and in the strange way we do business so I haven't had to consider this until the current opportunity has come up.

Where did the 6-12 months come from? OP has stated there is no time limit on the restriction? Even if a 6-12 month restriction would have been enforceable, it doesn’t matter because that isn’t in the contract.

Yes, this. It literally says 'can't set up this service, in these areas, whilst the company is operating'. That could be for the next 15 years for all I know. Even if they did an hour a week, that counts as operating.

I think you need to seek actual legal advice.
Restrictive covenants should be set for a reasonable amount of time. In perpetuity does not seem ‘reasonable, but that is subjective.

Also, in your example it specifically states “wedding dresses”, which might be why their time frame is “as long as they’re operating”.

As you are doing Designer Suits, in theory, this should not be a problem as it doesn’t breach the restrictions. But to be safe I’d speak to a lawyer. Contract law can be very vague.

Thanks, I am waiting for a response from one

On the basis there was no actual clause to read, I gave general advice anchored to the most stringent case scenario.
If it truly is unlimited by time (and there is no indirect reference to a time limit) then I would agree it's unenforceable. Seems weird to have gone as far as including a non compete but not doing the basics of enforceability though. Geographies and type of business specialty are the usual ones to be argued as too wide and therefore unenforceable.