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Ben Jones
Ben Jones, Solicitor
Category: UK Employment Law
Satisfied Customers: 38666
Experience:  Expert in UK Employment Law
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Hi, I have been offered a job with a rival company which I

Resolved Question:

Hi, I have been offered a job with a rival company which I have verbally accepted but in my current
contract it states I cannot move to a rival company within three months of leaving my current employment, if I were to hand in my resignation and join this rival company will I be sued and if so how likely would it be they would succeed? Backround - 2 years as a stock planner for a uk wide AV / IT distributer. Potential new position - stock planner with a rival uk wide AV / IT distributer. Covenant: 'Restrictive Business' means any business where it's primary function relates to the provision of the distribution, repair or rental within the UK of electrical presentation equipment.

You will not for a period if 3 months after the termination of your employment, be engaged in or concerned in any capacity in any business concern that is in competition with any restrictive business. This cause shall not restrain you from being engaged or concern in so fat as your duties or work shall relate solely to:

Geographical areas where the business concern is not in competition with the restrictive business service or activities of a kind which you were not concerned to a material extent during the period of 12 months ending on the date of termination of employment.

The obligation imposed on you by this clause extend to not only on your own account but also on behalf of any other firm, company or other person and shall apply whether he acts directly or indirectly.

Each sub-clause and part of each such sub-clause constitutes entirely desperate and independent restrictions. If any of the restrictions contained on the above clause or sub-clause or part of sub-clauses is held not to be valid as going beyond what is reasonable for the protection of the interests of the company but would be adjudged reasonable if part or parts of the wordly thereof were deleted, the said restriction shall apply with such words deleted to the extent so adjudged as May be necessary to make it enforceable.

Thanks
Submitted: 11 months ago.
Category: UK Employment Law
Expert:  Ben Jones replied 11 months ago.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. How will your move to this new company impact your current employer?

Customer: Well I as I work in purchasing I know the prices and special prices they purchase at, vendor contacts and may know some sensitive info regarding products and strategy, other than that losing me as an employee. I don't really deal with customers so would not be stealing business away from the company.
Ben Jones :

It is common for employers to want to protect their business interests from unfair competition by current and ex-employees. This applies especially to employees who have knowledge of sensitive and valuable information, have considerable influence over the workforce or have strong customer connections. However, at the same time it is in the public interest to ensure that employees are free to move between employers and use their skills, knowledge and experience in a new setting.


 


Whilst employers try and impose certain restrictions on their employees, under the doctrine of restraint of trade, any contractual term which seeks to restrict an individual's freedom to work for others or carry out his trade or business is illegal and unenforceable. The exception is when the employer can show it has a legitimate business interest that requires protection.


 


Legitimate business interests (LBIs) are commonly accepted to include:



  • Trade secrets and confidential information

  • Trade or customer connections

  • Stability of the workforce


 


An employer cannot impose a restrictive covenant merely to stop someone competing, but it can seek to stop that person using or damaging something which legitimately belongs to it, such as an LBI.


 


So if you know sensitive company information such as pricing, products, strategy, etc which could affect the business then it is quite possible that a restrictive covenant could be seen as reasonable because it is there to protect an LBI. However, if you did not use any of that information then they may find it difficult to argue that you will in some way affect their business and cannot stop you working for a company, even if it is a competitor.

Customer: Ok, I am also only line staff and not a manager so I guess that makes some difference too?
Customer: Given the evidence would you say that if I did join the new company it would be unlikely they would try and in force this and if they did they would likely lose in court as long as I do not share sensitive information?
Ben Jones :

yes quite likely that being line staff may affect this as in general it is the level of knowledge and influence that you have that will be relevant. Unfortunately no one can predict whether they will take this further or not - each employer is individual and will perceive this differently, also will depend on how seriously they view this, whether they have the time and expenses to pursue this, etc

Customer: There is something else I would also like to get advise on; I am due a bonus in October pay check (last paycheck if I give a months notice) bonuses are payed if I hit my KPI's (which I have done) over the financial year July-June. As they have said I have hit all KPI's and will receive a bonus on October could they not then pay this if I leave the company?
Ben Jones :

As this is an entirely separate query you would need to post it as a new question I am afraid, but I would be glad to help with it if necessary

Customer: I believe it is relevant and relates to the first question?
Ben Jones :

the first question is solely to do with the restrictive covenants in your contract, the bonus is entirely separate to any restrictive covenants

Customer: Ok, the info provided is good but it is simular to
Customer: *similar to info I have already found on the web. Ideally I need to know my chances if this does go to court.. Based on what I have given you could you advise based on your opinion if this went to court how likely would it be that I would win?
Ben Jones :

The issues with providing prospects of success are that one needs to conduct a full case analysis first which is impossible to be done via a couple of paragraphs of information. As such if you require prospects of success you need to consult a solicitor in person who can examine all documents you have in your possession and also interview you to gain further information as necessary. As mentioned in our terms which you can see on this page:

"You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains."

Customer: I understand where you are coming from, I'm just after a hypothetical based on evidence you have in front of you?
Ben Jones :

it would all depend on what information you have and how you use it, also it would depend on what evidence the company has that you have or are likely to infringe their LBIs. So it depends on quite a few factors and the presence or lack of each one can turn the outcome in one party's favour, hence why one particular outcome cannot be given based on this limited information

Customer: Would you say these clauses are often enforced or are they there more as a scare tactic?
Ben Jones :

I would say they are more often pursued against senior employees with a great deal of influence over a business, rather than just 'normal' employees

Customer: Ok, thanks
Ben Jones :

My pleasure, hope this has clarified a bit more

Ben Jones, Solicitor
Satisfied Customers: 38666
Experience: Expert in UK Employment Law
Ben Jones and other UK Employment Law Specialists are ready to help you

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