Restricted covenants

[Hotandflustered]

Hi,

Sorry I am totally clueless about RC’s and never come up against them before.

Just wondering about restricted covenants (cannot work for competitor 6 months after employment) - does this really cover a fixed term role or if someone joins a company and in early days realises the job fit isn’t them are they still bound? Equally what if the company decide to let the employee go?

It could do. They are often unenforceable, but it depends on the exact circumstances. Your query is too vague to even hazard a guess.

Often they aren't worth the paper they are written on, because enforcing them can be expensive.

However this very much depends on circumstances e.g. seniority/role, access to commercially sensitive information, potential to take key staff etc as the court would look at reasonableness.

For a Senior VP with access to sensitive information going to a competitor it may be a reasonable expectation, a fixed term administrator in Finance probably not

Worded that badly - if the Senior VP is going to a competitor the RC may be considered reasonable

It could apply to less "important" staff - a hairdresser with 10 mile restriction, for example. Without details, speculation is pointless.

I started a quoted 'junior' role what I can only best describe as on a helpdesk (A) but for a large company on a 12 month fixed term contract (who have the 6 month clause of not working again in the industry it seems after leaving them) training hasn't been easy, don't feel I fit in with the culture and I wouldn't say the job is junior (but that's a whole other set of tears, fears and uncertainty) which I'll try to get past no matter what happens.

Meanwhile, in the most ironic timing

Basically I interviewed a few months ago at length for a permanent role with straight shifts (B) whom is a much smaller outfit only doing a third of services of what A does and I'd go as far as to say different clients. They have made new contact as they found themselves with a reopened vacancy but to be fair wouldn't have known I'd not long started with another company in their industry.

A and B both have the same Nature of Business SIC code on companies house (hoping they would have different codes but no) and I really genuinely thought the RC could mean trouble for both me and the potential new employer should I make the move. Big co v's small who I appreciate may not want to get involved further.

Hope this makes more sense. I've really started to notice more of these clauses pop up in particular this year on getting jobs - the last place I worked for (customer service for one of those 'pay weekly' companies) their contract said I couldn't work for 18 months for other firms of similar nature so it got me thinking perhaps I need to know more!

Most employers don’t want the cost or bother of chasing this up. It’s also wholly unreasonable in most cases. People cannot be forced to travel miles away for ordinary jobs. These clauses are “frighteners” to make people stay. 18 months is just ludicrous. They would have pursue an employee for breaking a contract but what loss have they actually suffered? Yes, the cost of recruitment for a replacement, but in most cases the loss is minimal unless they have paid for expensive training. Then there might be restrictions on when an employees can leave without incurring repayment of training costs. Sometimes not going to a competitor might be stipulated but this has to be a proportionate restriction. Might apply to someone with design “secrets” or R&D info. Definitely unfair in a standard job.

I couldn't work for 18 months for other firms of similar nature

If you aren't a senior member of staff then as a PP said the clause is to put the frightens on you.

Even if you were a member of staff with client information and/or commercial information, like I can be, they can put other clauses to stop you using this information outside your job role and with future companies.

The main issue you will have with allowing that clause in your employment contract is that you may not get a reference. So if you get a job with a clause in it like that either ask them to remove the clause before siging the contract - this is easier if the company has very large clients and those clients have lots of subsidiaries - or realise they may be difficult in giving you a reference.