Non-Compete Clauses

[frostyboy21]

Good evening,

I am looking for some advice if possible.

I have worked in the UK self-catering industry for the last 10 years, and have been in my current role for just over a year, starting in one role, and then being promoted to a new position in May, where I signed a new contract with some different terms in it around non-competing. An industry leader has recently approached me for a role as Sales Director and offered me the role. I have yet to sign this contract as I have examined the most recent contract and some specific terms worry me, similarly I have not discussed this with my current employers:

Restrictive Covenant
d) at any time during the Restricted Period, be involved in any Capacity with any business concern
which is (or intends to be) in competition with any Restricted Business.

29.2 None of the above restrictions shall prevent you from:
b) being engaged or concerned in any business concern as far as your duties or work shall relate
solely to geographical areas where the business concern is not in competition with any
Restricted Business; or
c) being engaged or concerned in any business concern, provided that your duties or work shall
relate solely to services or activities of a kind with which you were not concerned to a material
extent in the Relevant Period.

My current role is about heading up Customer Experience, and nothing sales-related. In contrast, the offer of employment is for a sales leader role and has nothing to do with customer retention or experience. I have a one-month notice period and a 6 month restricted period. Both businesses have National coverage so the geographic area overlaps are difficult to avoid. My current employer has taken several employees the other way and taken the risk on the covenants.

The new role is a significant improvement in salary and package and I am keen to take the role.

Would anyone be able to advise on whether the broadness of these points in the covenant would make it enforceable, and also any advice for approaching current employers to broach this, and indeed whether it is worth continuing with the proposed offer, or better to step away.

Any help would be greatly appreciated, and if any further information would be helpful then I am happy to provide this.

Thanks

[atticus]

You have not given the full terms of the restrictions, and so the only answer that can be given is that the quoted restriction may well be enforceable.

What is the Restricted Period? And the Restricted Business? And the Relevant Period?

[frostyboy21]

Hi and thanks you for you comments.

The full terms of the restrictions are as follows:

29. Restrictive Covenant
29.1 In order to protect the Confidential Information and any Group Company’s business
connections to which you have access as a result of your employment, you covenant with us
(on our own behalf and as trustee and agent for each Group Company) that you shall not:
a) at any time during the Restricted Period solicit or endeavour to entice away from any Group
Company the business or custom of a Restricted Customer with a view to providing goods or
services to that Restricted Customer in competition with any Restricted Business.
b) at any time during the Restricted Period in the course of any business concern which is in
competition with any Restricted Business, offer to employ or engage or otherwise endeavour to
entice away from any Group Company any Restricted Person.
c) at any time during the Restricted Period in the course of any business concern which is in
competition with any Restricted Business, employ or engage or otherwise facilitate the
employment or engagement of any Restricted Person, whether or not such person would be in
breach of contract as a result of such employment or engagement.
d) at any time during the Restricted Period, be involved in any Capacity with any business concern
which is (or intends to be) in competition with any Restricted Business.
at any time during the Restricted Period be involved with the provision of goods or services to (or
otherwise have any business dealings with) any Restricted Customer in the course of any business
concern which is in competition with any Restricted Business; or
f) at any time after the Termination Date, represent yourself as connected with any Group Company
in any Capacity, other than as a former employee, or use any registered business names or trading
names associated with any Group Company.
29.2 None of the above restrictions shall prevent you from:
a) holding an investment by way of shares or other securities of not more than 5% of the total
issued share capital of any company, whether or not it is listed or dealt in on a recognised
stock exchange.
b) being engaged or concerned in any business concern as far as your duties or work shall relate
solely to geographical areas where the business concern is not in competition with any
Restricted Business; or
c) being engaged or concerned in any business concern, provided that your duties or work shall
relate solely to services or activities of a kind with which you were not concerned to a material
extent in the Relevant Period.
29.3 The restrictions imposed on you by this clause apply to you acting directly or indirectly, and
on your own behalf or on behalf of, or in conjunction with, any firm, company, or person.
29.4 The periods for which the restrictions in clause 29.1 apply shall be reduced by any period that
you spend on Garden Leave immediately before the Termination Date.
29.4 If, during your employment or before the expiry of the last of the covenants in this clause,
you receive an approach or offer to be involved in any Capacity in a business which competes
with any part or parts of any Group Company's business with which you are or have been
involved to a material extent during the Appointment, you shall notify a Director, providing a
copy of the offer and give the person making the offer a copy of this clause within seven days
of the offer being made.
29.5 Each of the restrictions in this clause is intended to be separate and severable. If any of the
restrictions shall be held to be void but would be valid if part of their wording were deleted,
such restriction shall apply with such deletion as may be necessary to make it valid or effective.
29.6 If your employment is transferred to any firm, company, person, or entity (the "New
Employer") pursuant to the Transfer of Undertakings (Protection of Employment) Regulations
2006, you will, if required, enter into an agreement with the New Employer containing post-
termination restrictions corresponding to those restrictions in this clause, protecting the
Confidential Information, trade secrets and business connections of the New Employer.

The other information requested is as follows:
Restricted Period means the duration of your employment with the Company and for six months after the Termination Date.
Restricted Business means those parts of any Group Company’s business with which you were involved to a material extent in the Relevant Period.
Relevant Period means the period of 12 months immediately prior to the Termination Date.

Hope this can provide clarity, and thanks again for taking the time to respond.

[atticus]

The other information requested is as follows:
Restricted Period means the duration of your employment with the Company and for six months after the Termination Date.
Restricted Business means those parts of any Group Company's business with which you were involved to a material extent in the Relevant Period.
Relevant Period means the period of 12 months immediately prior to the Termination Date.

You need to understand those definitions, and from what you have said particularly "Restricted Business".

I remain of the view that these restrictions are likely to be upheld.

If you are concerned about clause 29(d) then I suggest that you have a conversation with your present employer, explaining the nature of the new role and how it will not threaten their business. Many companies are more worried about their ex employees poaching customers and staff: you can explain if appropriate that there will be no question of this.