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Alex J.
Alex J., Litigator
Category: UK Employment Law
Satisfied Customers: 3665
Experience:  LLB, LPC, DELF
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I am in a quandary. I did contract work business in the UK.

Customer Question

I am in a quandary. I did contract work for a business in the UK. They tried to tell me that I cannot work for anyone that they have referred me to or their associates. The work that they would like me to do is outside the scope of that company and the
company refused that sort of work with a client that I worked with before. It didn't fit the mold of what they were trying to do. They company wanted to expand the position and the brother company wants to hire me to do sales. I would have not met them had
I not worked for that company but it is outside the scope of what the UK company does. But it states I cannot work for their "associate" and he is not technically their associate. It also says I cannot work for anyone that I contracted with outside their company
for five years. They wanted me to sign something that says that I will get fined $3000 if I violate that contract. I basically quit the UK company and worked for their brother company. The original person I worked for- Steven- thinks that I violated the contract
and told the company as much and now they are refusing to pay me my last check. I don't have any formal agreement with the brother company and so far I have only received commission checks. Am I in violation of the contract if I cut ties with the UK company
when they refused work in the first place? Can they fine me $3000 without proof that I work for them or just based on Steven's word even if I don't directly work for him? Are there any labor laws that say the UK company can't enforce that?
Submitted: 1 year ago.
Category: UK Employment Law
Customer: replied 1 year ago.
They have this as the outprocessing agreement that they want me to agree to:Working, engaging with or forming any kind of commercial relationship directly with clients that we've introduced you to is not permitted at any time, including after the end of your agreement with us.Is it lawful for them to dictate that I can't work for anyone AFTER I leave their employ EVER? It seems a bit excessive to me.
Expert:  Alex J. replied 1 year ago.

Hi Thank you for your question and welcome. My name is ***** ***** I will assist you. Did you ever sign a contract containing non compete or non solicitation clauses? Or even a clause that specifically says you cannot work for their associates? Kind regards AJ

Customer: replied 1 year ago.
It says:
This contract is a rolling month by month agreement. It may be terminated by either party giving one month's notice in writing.Direct commercial relationships of any kind between you and clients introduced by you by Time Etc. are strictly prohibited at all times.You are not permitted, at any time (including within the 24 months following the termination of this contract) to engage in any kind of commercial relationship with any client, contact, or third party introduced to you by us, whether formal or informal.Should you be found to be in breach of this term you agree that we may terminate your freelancer agreement immediately with the loss of any earnings accrued but not yet paid and the loss of any future income through Time Etc. Furthermore you agree to pay a financial penalty of not less than $3,000 to Time Etc. immediately on demand without deduction or set-off.The Freelancer agrees to work in a self-employed capacity and agrees to complete such work at Time Etc. sees fit.
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. The first point to note is I think the penalty will not be enforceable. The wording is not clear as to what the penalty actually applies to it just you will "pay a financial penalty". An English court is unlikely to enforce a penalty clause of this nature as it is against public policy. The second point I would not is you can have non compete and non solicitation clauses under English Law, however they are seen as a restraint of trade and therefore must contain at least a commercial justification for the clause and there must be atime limit on it. On reading this there appears no limitation or reasonableness to it, I think they would struggle to enforce this in England. Are they threatening to sue you? Kind regards AJ

Customer: replied 1 year ago.
They are threatening me with the $3,000 fine and to withhold my final paycheck.
Customer: replied 1 year ago.
I am in the U.S. working for them in the UK- I'm not sure if that makes a difference.
Expert:  Alex J. replied 1 year ago.

Hi. Thank you. If they don't pay your final pay cheque you can sue them in the UK for the money. If they want to try and enforce the penalty they will have to potentially sue you but the wording of the clause you have sent does not reflect a clause I would expect is legally enforceable. Kind regards AJ