Anti compete clauses
Discussion
Scabutz said:
It's worth searching as this has been done to death on here a lot contributed to by a barister who had a lot of knowledge on the subject.
Short answer is yes 6 month ones generally are enforceable.
Goverment have done recent consultation to limit to max 3 months.Short answer is yes 6 month ones generally are enforceable.
It just seems crazy that you could be out of work for so long. 6 months is ages.
Racehorse said:
Scabutz said:
It's worth searching as this has been done to death on here a lot contributed to by a barister who had a lot of knowledge on the subject.
Short answer is yes 6 month ones generally are enforceable.
Goverment have done recent consultation to limit to max 3 months.Short answer is yes 6 month ones generally are enforceable.
It just seems crazy that you could be out of work for so long. 6 months is ages.
It's very frustrating. Couple of years back my company was taken over, I was involved in the due diligence and there were two parties interested. One of them bought us and the other tried to poach me but I had an anti compete and it wasn't a good enough offer to sit on my arse and burn through reserves for 6 months.
Are you leaving or being made redundant? If redundancy you could probably negotiate being released from it. That's what some people did when they were redundant after the takeover
Scabutz said:
Racehorse said:
Scabutz said:
It's worth searching as this has been done to death on here a lot contributed to by a barister who had a lot of knowledge on the subject.
Short answer is yes 6 month ones generally are enforceable.
Goverment have done recent consultation to limit to max 3 months.Short answer is yes 6 month ones generally are enforceable.
It just seems crazy that you could be out of work for so long. 6 months is ages.
It's very frustrating. Couple of years back my company was taken over, I was involved in the due diligence and there were two parties interested. One of them bought us and the other tried to poach me but I had an anti compete and it wasn't a good enough offer to sit on my arse and burn through reserves for 6 months.
Are you leaving or being made redundant? If redundancy you could probably negotiate being released from it. That's what some people did when they were redundant after the takeover
I am looking to leave. Challenge is guessing they would have to get injunction and from my reading that is a long and expensive process?
Racehorse said:
Jasandjules said:
Yes they can be.
Of course, can is the operative word. Firstly they must be reasonable.... Second the employer must be willing to enforce...
Reasonable in what way?Of course, can is the operative word. Firstly they must be reasonable.... Second the employer must be willing to enforce...
For example, I would say that saying you cannot work at a 'competitor' is too broad and not enforceable. What is a competitor? How is it defined?
Saying that you cannot work at another company, where you are personally involved in providing the same services to the same client may be enforceable.
Jasandjules is the expert here though, so listen to him / her.
ETA: Consultation - is this a redundancy situation? This isn't something I'm familiar with but if they are making you redundant (ie choosing to make your role redundant), then I don't believe they could enforce such restrictions.
Edited by CharlesElliott on Saturday 24th June 19:55
CharlesElliott said:
ETA: Consultation - is this a redundancy situation? This isn't something I'm familiar with but if they are making you redundant (ie choosing to make your role redundant), then I don't believe they could enforce such restrictions.
No he means the Government consultation on these types of clauses and should there be legislation around them etc.Edited by CharlesElliott on Saturday 24th June 19:55
Racehorse said:
How can it be enforced if a company wanted to.
Would it be via injunction?
Yes, they would seek an injunction because you are in material breach of contract. The injunction can prevent you taking up another role and if you took it anyway you'll be in contempt of court and in really deep sWould it be via injunction?
t. Scabutz said:
Racehorse said:
How can it be enforced if a company wanted to.
Would it be via injunction?
Yes, they would seek an injunction because you are in material breach of contract. The injunction can prevent you taking up another role and if you took it anyway you'll be in contempt of court and in really deep sWould it be via injunction?
t. I am not in this position but good to get understanding of restrictions etc
Racehorse said:
Guessing it takes a while to get injunction?
I am not in this position but good to get understanding of restrictions etc
IF there was a real risk of harm to the business they could seek an interim injunction (which is swift) and which would hold until the main claim could be heard. I am not in this position but good to get understanding of restrictions etc
Racehorse said:
Are anticompete clauses enforceable.
For example you are not allowed to work for 6 months at a competitor after leaving a company. That makes it 3 months notice + 6 months out of work. It is crazy that you are not reimbursed for those 6 months
To get a more accurate reply you might want to post the exact wording of the relevant clause/s in your contract. For instance the wording might inidcate whether or not it applies in the case of redundancy. For example you are not allowed to work for 6 months at a competitor after leaving a company. That makes it 3 months notice + 6 months out of work. It is crazy that you are not reimbursed for those 6 months
A sweeping "you may not work for a competitor" clause is generally not enforceable. For instance, someone working on the checkout at Tesco can't be prevented from moving to Sainsburys.
To be enforceable the non-compete clause must be "protecting" something of the employer's, not just interfering with the employee's ability to get another job. After all, most people move around in similar jobs within the same industry. The restrictions must be "reasonable".
A former employer can prevent the former employee from either using himself or passing on to a new employer any trade secrets or other confidential information. The former employee can also be restricted from immediately phoning round all the customers and saying "I've set up my own business or moved to a competitor, why don't you switch supplier?".
Yes, in appropriate circumstances some or all of the restrictions on the former employee may be enforceable. It is not possible to give a simple summary because enforceability will always depend on the particular wording of the clause and the facts of the particular case.
To be enforceable the non-compete clause must be "protecting" something of the employer's, not just interfering with the employee's ability to get another job. After all, most people move around in similar jobs within the same industry. The restrictions must be "reasonable".
A former employer can prevent the former employee from either using himself or passing on to a new employer any trade secrets or other confidential information. The former employee can also be restricted from immediately phoning round all the customers and saying "I've set up my own business or moved to a competitor, why don't you switch supplier?".
Yes, in appropriate circumstances some or all of the restrictions on the former employee may be enforceable. It is not possible to give a simple summary because enforceability will always depend on the particular wording of the clause and the facts of the particular case.
Jasandjules said:
Racehorse said:
Guessing it takes a while to get injunction?
I am not in this position but good to get understanding of restrictions etc
IF there was a real risk of harm to the business they could seek an interim injunction (which is swift) and which would hold until the main claim could be heard. I am not in this position but good to get understanding of restrictions etc
Usually only enforced if you cause an issue - or take away trade secrets. If you're in a sales role & try to poach all your old customers for example - that would be an entirely reasonable restriction.
If you describe your current role & what you'd move to, then you will likely know for yourself whether your current employer would have a reasonable concern about your new role.
Also, your new employer might not be overly happy with you......
If you describe your current role & what you'd move to, then you will likely know for yourself whether your current employer would have a reasonable concern about your new role.
Also, your new employer might not be overly happy with you......
Scabutz said:
Are you leaving or being made redundant? If redundancy you could probably negotiate being released from it. That's what some people did when they were redundant after the takeover
It's a long time ago since I was in this position (more than 20years), but the legal advice I received at the time was that this was only enforceable in the case that I handed in my notice. Getting fired or made redundant automatically nullified the anti-compete.Fully accept that the law on this could have changed since then...
sunbeam alpine said:
Getting fired or made redundant automatically nullified the anti-compete.
If the restrictions are simply written as applying during the continuation of employment that would be right.However, a well drafted contract will say that non-compete restrictions remain in force AFTER termination of the employment.
sunbeam alpine said:
Scabutz said:
Are you leaving or being made redundant? If redundancy you could probably negotiate being released from it. That's what some people did when they were redundant after the takeover
It's a long time ago since I was in this position (more than 20years), but the legal advice I received at the time was that this was only enforceable in the case that I handed in my notice. Getting fired or made redundant automatically nullified the anti-compete.Fully accept that the law on this could have changed since then...
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