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Restrictive covenants

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  • Restrictive covenants

    Hi,

    I sold my ltd business a while ago and am now thinking about going back into the type of work I used to do but as an employee not owner. I have had a couple of old clients say to me that they want to leave the firm I sold and join me at the new firm I work at. My question is would I face any issue if I accepted them, I would most likely be the person they worked with and not someone else within the firm.

    It has been over 2 years since I sold the business.

    Thank you

    ​RESTRICTIVE COVENANTS
    7.1 Subject to clause 7.3, each Seller undertakes with the Buyer and
    • the Company that, except with the prior consent in writing of the Buyer he will not, either on
      his own account or through or in conjunction, association or by arrangement with or on behalf
      of any person or persons whether for his own benefit or that of others and whether directly or
      indirectly for a period of two years from the Completion Date:
      7.1.1 carry on or be employed, engaged, concerned or interested (directly or indirectly) in
      any Restricted Business in England and Wales, but this sub clause will not prevent
      him from holding for investment up to 3% of any class of securities of a company
      which are dealt with on a recognised investment exchange;
      7.1.2 solicit, canvass or approach or otherwise seek the custom of any person (including a
      Purchasing Authority), who, at any time during the 12 months immediately prior to the
      Completion Date:
      a) was provided with goods or services by the Company from time to time;
      b) was the provider of goods and services to the Company from time to time;
      c) has been a user of the services provided by the Company or who has
      been canvassed by the Company (otherwise than by general advertising)
    ​​​​​With a view to becoming a user of the services provided by the
    Company;
    d) had negotiations with the Company from time to time relating to the provision
    of such goods or services; or
    e) otherwise dealt with the Company from time to time;
    for the purpose of offering to that person goods or services similar to those with which
    he was so provided or otherwise to entice away the custom or business of that
    person from the Company;
    7.1.3 deal with or supply to any person specified in clause 7.1.2 goods or services similar
    to those with which such person was so provided at any time during the 6 months
    immediately prior to the Completion Date or enter into any transaction with such
    person in relation to such goods or services;
    7.1.4 solicit or entice away or endeavour to solicit or entice away from the Company or
    offer to employ or offer to conclude any contract for services with any director,
    manager, consultant or senior employee who worked for the Company at any time
    during the 6 months immediately prior to the Completion Date (whether or not such
    person would commit any breach of contract by reason of his leaving service), save
    that the Sellers shall not be precluded from interviewing or recruiting any senior
    employee who was engaged by the Company in the six months immediately prior to
    the Completion Date who responds on their own initiative to a bona fide recruitment
    advertisement;
    7.1.5 employ or conclude any contract for services with any director, manager, consultant
    or senior employee who worked for the Company at any time during the 6 months
    immediately prior to the Completion Date
    Tags: None

  • #2
    What's clause 7.3?

    So far if it's been over two years since the completion date you should be fine.
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

    Received a Court Claim? Read >>>>> First Steps

    If we have helped you we'd appreciate it if you can leave a review on our Trust Pilot page

    Find Solicitors offering fixed fees on our sister site - JustBeagle.com

    Comment


    • #3
      Thank you for coming back to me amethyst.

      Other info is

      Subject to clause 7.3, each Seller undertakes with the Buyer and
      the Company that, except with the prior consent in writing of the Buyer he will not, either on
      his own account or through or in conjunction, association or by arrangement with or on behalf
      of any person or persons whether for his own benefit or that of others and whether directly or
      indirectly use any trade or domain name or e-mail address used by the Company at any time
      during the 2 years immediately preceding the date of this Agreement or any other name
      intended or likely to be confused with any such trade or domain name or e-mail address.
      7.3 None of the Sellers shall be in breach of clause 7.1 in respect of anything done by any of
      them in connection with his duties or position as an employee of or consultant to any member
      of the Buyer's Group.
      7.4 Each of the covenants contained in clause 7.1 shall be deemed to be separate covenants and
      independent of each other.
      7.5 The Sellers acknowledge that damages in respect of breach of any of the provisions of clause
      7.1 may not be an adequate remedy and that the Buyer shall be entitled to the remedies of
      injunction and specific performance as well as any other equitable relief without the need for
      proof of special damage for any threatened or actual breach of any of the Sellers' obligations
      in clause 7.1.
      7.6 Whilst the Sellers have taken independent legal advice on the covenants contained in clause
      7.1 and the parties hereto consider that such covenants are reasonable as between themselves their respective interests and the public interests in all the circumstances in which
      this Agreement will operate in order to protect the interests of the Buyer, it is agreed by and
      between the parties that if any such restrictions shall be adjudged by a court of competent
      jurisdiction to be void or unenforceable but would be valid and enforceable if deleted in part or
      reduced in application, such restrictions shall apply with such deletion or modification as may
      be necessary to make them valid and enforceable.

      Comment


      • #4
        Okay, nothing weird in that bit. You are beyond 2 years from completion and therefore appear to be free to do what you like
        “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

        Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

        Received a Court Claim? Read >>>>> First Steps

        If we have helped you we'd appreciate it if you can leave a review on our Trust Pilot page

        Find Solicitors offering fixed fees on our sister site - JustBeagle.com

        Comment


        • #5
          Thank you. I did think that and remember my solicitor at the time pushing to keep it at two years whilst there's wanted 5 saying to me that I was still young and feelings about working might change given a bit of rest. He was spot on.

          Thanks again this service is great

          Comment


          • #6
            Your solicitor did right pushing it back to two years as it saves you having to argue the case - 5 years likely would have been arguable as unnecessarily restrictive and thus potentially unenforceable, but had it been in the agreement you'd likely not be looking at getting back into the industry at all until that period was over.
            “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

            Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

            Received a Court Claim? Read >>>>> First Steps

            If we have helped you we'd appreciate it if you can leave a review on our Trust Pilot page

            Find Solicitors offering fixed fees on our sister site - JustBeagle.com

            Comment

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