Restrictive Covenants - Applicability

[James999]

Hi,

I have received an offer of employment from Y. I am currently employed by X. I would like to accept the offer from Y, but am concerned that in doing so I might be breaking restrictive covenants in my current employment contract with X.

Company Y is not a competitor to X - they are in different industries, and undertake different activities. However, Company X does currently provide services to Company Y (and therefore Y is a client of X). I have been involved in the provision of these services to Y.

On the basis that X and Y are not competitors, that leaves the following covenant as potentially applicable:

"You will not deal with or provide or supply any Client any Goods or Services at any time during the period of twelve months following the Termination Date."

Is me accepting employment by a Client, the same as me providing services to the Client?*

Thanks,

James
*

[ULA]

Restrictive covenants are normally very precise about employment i.e. for a period of xx months after termination you will not be employed by any competitor, customer of supplier of the company etc

This is more ambiguous, however in the absence of more definitive terms as above then they may try to argue that services covers employment. This is particularly as you have been directly providing services to this client whilst in the company's employment.

Whether a terms a long as 12 months would stand up in court or be considered excessive then I am not sure and a lot will depend on your role and seniority in company x

*

[James999]

Thanks Ula for your helpful response. There is a separate covenant prohibiting me from being engaged in, interested in, or participating in a competitor business for six months. I had construed that as meaning I could not be employed by a competitor.

I am a mid-level employee within my current company (lower management) . I was a junior employee when I joined and when this contract was signed.

Given the very inconsistent wording throughout these covenants, the length of the restrictions, and the breadth of restrictions, I will take a risk and assume they are not enforceable.

Thanks for your help,

James

[ULA]

Your interpretation of that clause is correct.

Good luck but you know where we are if you have any more questions, just come back to this thread.*