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Ben Jones
Ben Jones, Solicitor
Category: UK Employment Law
Satisfied Customers: 38955
Experience:  Expert in UK Employment Law
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Hi, Im planing to open my own company and take my old clients

Resolved Question:

Hi,

I'm planing to open my own company and take my old clients with me. I have not signed any "no dealing" agreement with my current employer.
I am employed full time, my contract says that as long as I am employed by them I shall not be entitled to be the owner of or take any active or passive part in any other business or to have any other paid work or to assume paid duties without the written consent of my companies MD in each case. The similar obligation applies to unpaid duties.

My plan is to:
1.set up and register my company preferably when i am still employed
2. talk to customers I am dealing with (I am the only person to provide service to the customers due to my skills)
3. ask my customers if they want to work with my new company.
4. give notice once I secure clients for new company and as clients to give notice to my company

I am concerned:

Current employer, once I left the company, will file a legal action against me for breaking the above mentioned clause.
Shall I first give notice and during notice period start talking to my customers?
Submitted: 1 year ago.
Category: UK Employment Law
Expert:  Ben Jones replied 1 year ago.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. Is here any reason why you cannot wait until you have left the company to start approaching your old clients?

PS: I just have some scheduled maintenance on my internet connection so may unexpectedly go off but rest assured I will receive your replies and will respond shortly

Customer:

Hi,

Customer:

My name is XXXXX XXXXX reason why I would not want to wait is that:

Customer:

the cashflow is important to me

Customer:

the services provided to the clients should not be stopped, they need constant mainteneance

Customer:

when I leave there is no one that can serve them so they will be left unattended

Customer:

they then can feel disappointed and I will lose the reputation

Customer:

The current company will lose these clients anyway dues to my skills and language barrier

Customer:

Hi, sorry, had to amend my e-mail details. If you have sent anything, could you kindly resend the answer, please.

Ben Jones :

Thanks for your patience. If you do not have a post-termination restrictive covenant then there is little an employer can do to prevent you from acting in competition or dealing with your old clients. However, whilst you are still employment with them you will be bound by any restrictions that exist in your employment contract with them or any workplace policies that you are subject to.


 


So if you propose to do what you mentioned, even if you do this during your notice period, you would still be employed by them and subject to the restrictions in your contract. That means you could still be held to have acted in breach of the contract you have because these would apply until your last day of employment with them.


 


You will then have to consider what the possible repercussions of this could be. You may be disciplined and potentially dismissed if the employer treats this as misconduct. This could happen even if you have resigned and are in your notice period.

Customer:

Hi Ben,

Customer:

This was very helpful. However, what concerns me most, is that after I left the company I will be held responsible for the loss of the business or damaging the business in which I am at the moment.

Customer:

To be precise: can my current boss sue me for damaging the business after I have left the company (assuming I would set up my own business while still employed, without informing him?)

Ben Jones :

Your employer can only sue you for losses that have been incurred as a result of you breaching specific contractual terms. No breach of contract = no cause for claim

Customer:

Providing that my current company would not know that I am opening my own business (i.e. register the business, build my own website) and that find out only after I have left, this means they can still sue me? In other words it would be wise to wait untill I have terminated emplyment with them.

Ben Jones :

Yes that is correct, it is the safest option

Ben Jones :

Has your original query been answered?

Customer:

Hi Ben, just one more thing. I have resigned from work today and I am on notice period. Following your advice I will not set up my business while still in employment. However, my boss mentioned to me today that I cannot contact my customers for 12 months. I am surprised because as I had mentioned I have never signed any restrictive covenant. The only thing that I can see in the contract that applies to customers is in the "duty of confidentiality" section of my contract. And it says there that confidential information about the company's customers and suppliers cannot be disclosed during the employment ot after termination. But is approaching customers equal to disclosing information?

Ben Jones :

No it is not the same, to prevent you from contacting customers they would need a specific non-dealing or non-solicitation covenant, which you do not appear to have. Then again they may try and argue that you contacting the customers using a database you have created with client information amounts to a disclosure although applying this particular covenant to this situation may b difficult fr them to achieve

Ben Jones, Solicitor
Satisfied Customers: 38955
Experience: Expert in UK Employment Law
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Ben Jones
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Expert in UK Employment Law