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Ben Jones
Ben Jones, Solicitor
Category: UK Employment Law
Satisfied Customers: 38306
Experience:  Expert in UK Employment Law
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as part of my last question which i couldt finish asking you

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as part of my last question which i could't finish asking you as i had to go away on business , what i really wanted was a contract of employment for a watchmaker whose training didnt start with us but finishes with us and we do not want him to leave us before 3 years are up or after he leaves us legally not to set up in competition aginst us within a certain radius or for 3 years therafter
Submitted: 1 year ago.
Category: UK Employment Law
Expert:  Stuart J replied 1 year ago.

We cannot draft docs on here, sorry. I can tell you that a 3 year restriction is unenforceable. 3-6 months is as much as you will get away with.



I
will tell you now that courts are reluctant to enforce these kind of covenants.

Very
often, it comes down to who has the deepest pockets and who bottles out first
if proceedings are issued to enforce the covenant.



The
starting point is that these restrictions are void for illegality but if the business wishing to rely on the covenant can
convince a court that the restriction is designed to protect legitimate
business interests and it extends no further than is reasonably necessary to
protect those interest, then it will be upheld and can be enforced.



There
are three issues to take into account: one is the geographical area of the
restriction, two is the length of time, and three is the type of business.



All
three are taken into account.



A wide
geographical area is unlikely to be enforceable in the restriction is for more
than 6 months or 12 months.



It
is then necessary to look at the type of business. To stop someone being a
newsagent, for example, 50 miles away, even for three months, is ridiculous and
it is not necessary to protect the original business.



If
however the same newsagent could not be a newsagent within 1 mile radius for 12
months. That could be enforceable, just about, but it would be a good argument
to be had. Costly as well.





Trade secrets may be granted wider protection. If for
example you are going to use information that you gleaned at the original
business.


More?


 

Expert:  Ben Jones replied 1 year ago.
Hello, my name is XXXXX XXXXX my colleague has asked me to assist with this query as I am an employment lawyer. What exactly do you need please - a whole contract?
Customer: replied 1 year ago.


for ben jones


 


i need a whole contract please

Expert:  Ben Jones replied 1 year ago.
getting a contract is unfortunately not an easy task and would involve quite a bit of work - certainly not for the current value of the question I'm afraid. We are more of a Q&A service rather than providing full legal support
Customer: replied 1 year ago.


ok , I can do without the contract but as I just posted to which lawyer I don't know, I would like to draft a clause that the trainee cannot leave my business before 3 years are up and thereafter he cannot work for my competition for 12 months


 


will this term work ?

Expert:  Ben Jones replied 1 year ago.
what would you like to happen if he left before the 3 years are up?
Customer: replied 1 year ago.


to stop him or he would have to pay us back the 2,000 pounds plus of his training

Expert:  Ben Jones replied 1 year ago.
You cannot prevent him from leaving if he wants to but you can have a clause which stipulates he would be responsible for repayment of his training fees if he leaves within a specified period of time. Such clauses can be enforceable as long as they are reasonable and do not amount to a penalty clause. Ideally you would need a sliding scale for the fees to be repaid, which would reduce over time. Having the same amount to repay for the full 3 years will potentially make the clause unenforceable. For a genera wording use the following:

1. REPAYMENT OF TRAINING COSTS
1.1 You agree that if your employment terminates after the Company has incurred liability for the cost of your training you will be liable to repay some or all of the fees, expenses and other costs (the Costs) associated with such training courses in accordance with Clause 1.2.

1.2 Except in the circumstances set out in Clause 1.3, you shall repay the Company as follows:
(a) if you cease employment before you attend the training course but the Company has already incurred liability for the Costs, 100% of the Costs or such proportion of the Costs that the Company cannot recover from the course provider shall be repaid;
(b) if you cease employment during the training course or within 12 months of completing the training course, 100% of the Costs shall be repaid;
(c) if you cease employment more than 12 months but no more than 24 months after completion of the training course, 50% of the Costs shall be repaid;
(d) if you cease employment more than 24 months but no more than 36 months after completion of the training course, 25% of the Costs shall be repaid.
Thereafter, no repayment shall be required.

1.3 You shall not be required to repay any of the Costs under this clause 1 if:
(a) the Company terminates your employment, except where it was entitled to and did terminate your employment summarily; or
(b) you terminate your employment in response to a fundamental breach by the Company.

1.4 You agree to the Company deducting the sums under this clause from your final salary or any outstanding payments due to you.

1.5 You agree that if the Company waives your obligation to repay the Costs under this clause, you will be solely responsible for any income or other tax payable as a result of the waiver and you shall indemnify the Company on a continuing basis in relation to any such tax.


In relation to a non-compete clause if you are simply seeking to restrict him from working for a competitor, that on its own is unlikely to be enforceable. However, you can prevent him from using confidential information, trade secrets or steal your clients if he goes to work for a competitor.
Customer: replied 1 year ago.
what about restricting him from setting up on his own in competiton with me otherwise whats the point of training him and then he leaves me ?
I don't want to have to restart training a new person I want to force him to stay with me for 3 years from now - can I do it ?
Expert:  Ben Jones replied 1 year ago.
you cannot restrict someone from setting up in competition with you unless they are going to potentially breach your legitimate business interests such as trade secrets, confidential information, client lists, etc. The issue of them leaving soon after training will be dealt with by the training fees repayment clause, but you can't then prevent them from working in competition with you, this is a restraint of trade and won't be enforceable. Similarly you can never force a person to stay in your employment for a period of time - if they want to leave they will leave, they just may be responsible for the training fees if there is a clause that covers that

As your original question has been answered I would be grateful if you could please quickly rate my answer - it only takes a second to do. I can then continue providing further advice and answer follow up questions if needed. Thank you.
Ben Jones, Solicitor
Satisfied Customers: 38306
Experience: Expert in UK Employment Law
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