Non compete clause

[Matilda123]

Hi I need a bit of advice to decide wether I should talk to a lawyer.

I received a breach of contract letter from a security company I worked approx 1 year ago. It was not my main employment, I was doing odd jobs for them. Not on regular basis. I was stupid enough to sign a non compete clause (attached). About a year after I stopped undertaking any jobs for them I started my own security company with a co-director (Ltd) and was approached by a client who previously worked with the said company. My company did no persue the client, we were contacted by them directly because they were unhappy with the previous security arrangement (potentially breach of contract) . There is a personal feud between the owner of the other security company and my my partner so they are sending us 'legal letters' out of spite. It's a minor contract (single security guard).

My question would be: is the non compete clause reasonable if it covers period of 4 years (1 year before I was employed and 3 years after)? Is this wording legally correct (can I dispute this?) the non compete clause is against me personally and the contract would be undertaken by Ltd company by an employee of the company and not myself. Is the non compete clause be considered binding in this instance?

Thank you for any suggestion.

[ULA]

The clause mentions a "contract for services", were you an employee on their PAYE or were you contracted to provide services for which you invoiced the company and payment was then made to you?

[dslippy]

To me, the clause disallowing potential customers seems too wide, and that subclause should fail.
The meaning of solicit needs clarification against the background of what happened.
In reality these are determined by who wants to pay for a dispute - your former employer or you.
This is a highly technical and specialist area of law. Take that help.

[Matilda123]

Thanks for your replies ULA and dslippy I was an employee of that company (as an individual person) and was responsible for my own tax. not a subcontractor firm providing services. Do you think it makes a difference?

The Ltd company I have created with my codirector was created at least a year after I last worked for the previous company. Arrangement with the other company was not regular and there were issues with payments as well. This is why I stopped working for them.

I was basically served a letter threatening me with legal actions to seek damages. I personally think that apart from the time period the clause is not very specific andd therefore questionable. But I would be grateful for any opinion.

I wonder whether the cost for the case to the other company would be actually too high and he is just sending us thresting letter to scare me.

We have not startef an actual work for the client. Client just told the other guy that he is ending the contract with him for various reasons and must have mentioned something about our company.

Thank you

[atticus]

(a) prohibits soliciting the business of customers to whom it applies. It does not prohibit accepting business of such customers. Usually non-solicitation clauses are linked to a non-dealing clause to avoid exactly the kind of argument about who approached who.

[ULA]

Firstly if you were responsible for your own tax and NI then arguably you may not have been an employee but that is not what the main issue is here.

Secondly my view is that a 36 month non-solicitation clause would likely fail as this would be considered to a long a period after termination and therefore not enforceable.

I would not ignore the letter and suggest in the first instance you consider responding back along the lines of the fact the only part of the clause 24.2 that may be relevant is sub-section (a) however the client in question has not been solicited by your company nor have you attempted to solicit them from company xxx. The actual fact is that the client has approached you directly and under the terms of the clause this type of approach is not prohibited and therefore any legal action on their part would be likely to fail. Then see what response you get back which may give a better idea of how far they are willing to take this.

dslippy and atticus may also have some thoughts on this approach.

[atticus]

I agree with what ULA has just said.

[Matilda123]

Thank you so much ULA and atticus for your response and taking time to reply. It really gave me some perspective. I will do as suggested and test the waters. I would not ignore the letter.

I hope you don't mind if I follow up if I receive a reply. If it gets too serious I guess I will have to seek actual legal advice.

Have a great day everyone.

[ULA]

Please do come back to this thread if you have any further questions.