Contract of Employment-restriction of contacts and garden leave

[henrycat]

I have been working for 11 years on the same area doing the same job however we where bought out 3 years ago, in September 2009 a new sales manager was employed and he made many changes to the job role putting increase pressure on me to the stage that i went to the doctors who wanted to sign me off for stress. I made him aware of this and he said perhaps this isnt the job for you anymore and perhaps i should seek other employment. He has been asking for unreasonable tasks and emails me at all times of the day and night. We had signed new contracts in the first year and havent had an updated on since. I handed my notice in and am going to a competitor company. The contracts stipulates that I cannot work in the same area or talk to the customers/friends that i have built realtionships with over that time neither on a personal or business level for 6 months. They really intimidated me we when i had my exit interview and have took my business mobile but have let me continue to have my car until the end of my notice period. I was called back to empty my car of all business related documents. They are worried that the business will be lost as i was one of the most sucessful reps. I was also well on my way to hitting my months target however because they insisted that garden leave start with immeadiate effect and no contact with customers i am going to miss out on £400. Is there anything i can do.

[Amethyst]

Re: Contract of Employment-restriction of contacts and garden leave

It is quite standard for companies to have a clause in contracts, especially with sales reps, that you dont take contacts with you to a new company, and quite a few have can't work for a competitor clauses too. They cant dictate though who your friends are. Regarding the lost commission payments you'd have to look through your contract.

Thats a minor issue though, I possibly would be considering constructive dismissal - the increased pressure and unreasonable behaviour of your employer damaged your mental health - you bought it to their attention and they have a duty of care to you - rather than telling you to find alternative employment, they should have firstly looked at your role and how to reduce that stress on you, investigated moving you to another role etc.

You have to bring any claim in that respect quite quickly (within 3 months) so I would suggest having a chat with ACAS in the first instance see what they think and suggest.

[shamen]

Re: Contract of Employment-restriction of contacts and garden leave

I agree with Ame, thats constructive dismissal - even though you resigned, they put undue demands, pressure and requirements upon you that made your health suffer and which left you no choice but to leave. You should kick off a tribunal pretty quick on that. Something to bear in mind is if a tribunal rules that you were unfairly dismissed, its likely that your employer breached your contract of employment and as such any no compete clause is out the window. If you have got copies of emails or any other documentation/proof that would go a long way.

Regarding the no compete, can you post up the exact working of the no compete/restrictive covenant? These are notoriously hard to enforce and ultimately the ex employer (if they ever go as far as taking you to court) have to prove a material loss by your actions - also difficult. Simply showing a loss in sales and customers would be difficult; even if they had paper proof of a downturn in sales/customers, as you know one of their most successful reps resigned which could also be blamed for such a downturn

Post up the wording of the contract and lets go from there Im not up too much on employment law, the wife is the one doing that department so ill run it by her.

[shell]

Re: Contract of Employment-restriction of contacts and garden leave

Also, if you haven't already got rid of them, make sure you keep copies of all the emails he was sending, especially the ones out of hours. Knowing you were suffering from stress, this was undue pressure and harbouring on harrassment.

[Hope]

Re: Contract of Employment-restriction of contacts and garden leave

Non compete clauses are notoriously difficult to enforce. It's up to your ex employer to retain their customers by maintaining the service they give them. If they lose business to a competitor it can't be proved to be your doing, there would have to be other reasons. Customers don't just move their business because a rep leaves.

[henrycat]

Re: Contract of Employment-restriction of contacts and garden leave

Thanks for all your help, im more concerned on whether its legal for them to dictate about speaking to clients etc and the bonus. This is what is written in the contract.


Non- Solicitation of customers

You shall not for a period of 6 months after the termination date (without the previous consent in writing of the company) and whether on your own account or for any other person, firm or company directly or indirectly in conection with any competitive business solicit or endeavour to entice away from the company any person, firm or comapny:

18.1.1 who or which in the 12 months prior to the end of your employment shall have been a customer, potential customer of or in the habit of dealing with the company; and

18.1.2 with whom or which you had personal dealings in the course of your employment, to the 12 months prior to the end of your employment.

18.2 non dealings with customers

You shall not for a period of 6 months after the termination date (without the previous consent in writing of the company) and whether on your own account or for any other person, firm or company directly or indirectly in conection with any competitive business do any business with accept orders from or have any business dealings with any person, firm or company:

18.2.1

Who or which in 12 months prior to the end of your employment was a customer or a potential customer of the company; and

18.2.2 With whom or which you had personal dealings in the course of your employment in the 12 months prior to the end of your employment.

18.3 Non competition

You shall not for a period of 6 months after the termination date and within the regions the company opperates (without the previous consent in writing of the company) directly or indirectly be engaged concerned or interested (whether as a pricipal servant agent consultant or otherwise) in any competitive business.

18.4

Each of the subclauses set out above constitutes an entirely separate and independent restriction on you. /

18.5

In the event of any of the restrictions above shall be found to be void but would be valid if part of the wording thereof was deleted or the period of apllication or area reduced, such restrictions shall apply with such deletions or reductions as may be necessary to make them valid or effective.

18.6

Competititve business means any business or activity of a kind carried on by the company or any group company at the termination date and in which you shall have been directly concerned during the 12 months prior to the termination date.


I hope this helps...... i am concerned as the wholesalers backup was poor that some of these customers who only stayed out of loyality to me may choose to go elsewhere within the next 6 months.

Thanks again for your help, i am losing sleep worrying about all of this!
------------------------------- merged -------------------------------
They have took my blackberry away which is what they used to send emails and messages on and they have blocked me being able to get back on my emails from home. Two reps have left in the last month one has changed career totally and the other has gone to the same company that I am going to. She wasnt put on garden leave nor does it say anything about garden leave in my contract however she wasnt selling as much as i was so perhaps didnt find her so much of a threat. My new company are fine with the restrictions but my customers keep trying to contact me on facebook and as im not exdirectory have also rang me at home which is dangerous according to the contract.

[Hope]

Re: Contract of Employment-restriction of contacts and garden leave

If the customers were experiencing poor service that would be a good reason for them to look for an alternative supplier. Their decision to move their business could not be wholly attributed to your joining a competitor. Customers are free to place their business with whichever company they choose.

[shamen]

Re: Contract of Employment-restriction of contacts and garden leave

ill have to run some of that by the mrs but it looks like some of it seems a bit rich to me. That clause which says they can modify your contract terms at a later date if they got the wording wrong?

In the event of any of the restrictions above shall be found to be void but would be valid if part of the wording thereof was deleted or the period of apllication or area reduced, such restrictions shall apply with such deletions or reductions as may be necessary to make them valid or effective.

Not sure about that, sounds like someone thought they would be clever and throw in a catchall but not sure how enforceable that would be. Its my general understanding that if a particular term is proven to be unenforceable, ineffective or invalid then that particular term is out. Having a catch all to say that they can change the term later to remove any bit that makes it invalid seems cheeky, though im completely unsure what the law says on that regard.

One thing that does stand out is just how restrictive it is. Not having any contact with anyone INDIRECTLY related to a competitor? so thats basicly saying you cannot work for the electricity company that supplies electricity to a competitor of your ex employer. Id very much doubt that would stand up in court.

It could be a battle for you on this one to fight them on individual terms and I really suggest you speak to an experienced and well recommended employment lawyer. However, and I cannot stress this enough, speak to ACAS to see if you have a constructive dismissal case (which can mean you had no choice but resign because of your employers actions) - if you have a case and you are victorious in tribunal then your no compete and no solicit clauses dont exist as your whole contract is considered breached by the ex employer. Much easier and tidier.

[henrycat]

Re: Contract of Employment-restriction of contacts and garden leave

Thanks again for the advice i have already contacted acas and it was them that said about the grievance but to be honest at the time i thought it would just make matters worse and i was under enough stress (around May). One of the main reasons i left is because he expected me to drive from northampton to southampton, i needed to be there for 9am on the friday and i wasnt to cancel my pm appointments because he expected me to be back on the road by then. When i said this was unfair as i would have to be up at 5am to get there for 9 because of the traffic and would he expect his wife to do that his answer was that he isnt paying his wife! After handing my notice in they gave me the weekend to think about staying as they where going to change some things that was causing me distress but this was only after i handed my notice in told them that i could have made a complaint. I still decided to leave becase a leopard doesnt change his spots. Maybe they think they have given me a duty of care by doing this.

[Amethyst]

Re: Contract of Employment-restriction of contacts and garden leave

Re the catchall term, if it went to court and a court deemed say 12 months and ALL contact was unreasonable and uneccessary to protect legitimate business interests then the court could order 3 months and x,y,z, contact instead. So the clause still stands in essence.

I pasted some caselaw bits on Benny the Beagles thread earlier which might help if anyone wants to look deeper into the legalities of these type of clauses, I'm sure there's much more besides. Pinsent Mason guys (outlaw.com) explain it pretty well here > Restrictive covenants in employment contracts | OUT-LAW.COM by Pinsent Masons LLP

However, if the ex-employer can convince a court that the covenant is:

• designed to protect his legitimate business interests; and
• that it extends no further than is reasonably necessary to protect those interests

then it will be upheld and enforced.

[Amethyst]

Re: Contract of Employment-restriction of contacts and garden leave

After handing my notice in they gave me the weekend to think about staying as they where going to change some things that was causing me distress but this was only after i handed my notice in told them that i could have made a complaint. I still decided to leave becase a leopard doesnt change his spots. Maybe they think they have given me a duty of care by doing this.

Prior to handing in your notice you did discuss the issues with your manager and he refused to do anything saying you should look for alternative employment. That was the time for him to exercise his duty of care towards you, not after the stress has reached a level where you felt you had no option but to resign.

Good to hear you spoke to ACAS, it would have been an idea to raise a formal grievance at that time, but I can completely understand you not doing so, it does tend to increase the stress levels somewhat. Definately give them another call though now about your commission and the restrictive clause in the contract, and also ask them about the duty of care v stress/constructive dismissal issues. The ACAS procedure would have been for you to raise a formal greivance and for your employers to hold a meeting with you to discuss the issues - the procedures arent set in stone anymore (since april 2009) and IF anything went to tribunal it would only affect things in terms of a reduction any award (not saying you should go that route though just so you know it doesnt matter if procedures havent been followed to the letter - its more common sense these days )

[catch22]

Re: Contract of Employment-restriction of contacts and garden leave

If you're within the time limits to make a complaint down the constructive dismissal route, I think that would be worth a try as the demands are clearly above and beyond what should be expected. If you have the emails, it may also be worth questioning harassment and breach of the Working Time Regulations. Also, it may be worth running the terms of the contract past ACAS or a solicitor (in a free consultation) to see if it can be voided due to unreasonableness under S.12 of the Unfair Contract Terms Act. Just offering possible alternative solutions in case the constructive dismissal route doesn't work out. Best of luck.

[shamen]

Re: Contract of Employment-restriction of contacts and garden leave

I pasted some caselaw bits on Benny the Beagles thread earlier which might help if anyone wants to look deeper into the legalities of these type of clauses, I'm sure there's much more besides. Pinsent Mason guys (outlaw.com) explain it pretty well here > Restrictive covenants in employment contracts | OUT-LAW.COM by Pinsent Masons LLP

Ame,
I read the out-law piece, and it seems to both compliment and contrast the emplaw piece on the subject

http://www.emplaw.co.uk/content/inde...e=data/019.htm

Post termination restrictive covenants (ie Restrictive covenants in employment contracts which are intended to operate after employment has ended) are anti-competitive and in restraint of trade. The basic position is therefore that they are void as being contrary to public policy. If an employee contests the legal validity of such a covenant the onus is therefore on the employer to establish that it is a justifiable covenant.
Thus, for example, agreements not to poach staff or customers/clients from the employer or not to work for a competitor after employment has ended are basically void. They are enforceable only if the ex-employer can show that they do no more than is reasonable to protect his legitimate business interests.
The position is different during employment. A Court may grant an injunction forbidding an employee to work for his employer's competitors while the employment contract subsists regardless of possible non-enforceability of post-termination restrictive covenant
There is a general rule (sometimes called the rule in General Billposting Co Ltd v Atkinson HL 1909 AC 118 HL) that where an employer has behaved so badly towards his employee that the employee can treat his employment contract as at an end (ie can treat the contract as having been "repudiated" by the employer) then, because the contract has been ended by the employer's own fault he, the employer, cannot as a general rule enforce any post-termination restrictive covenants it may have contained. In practice this rule is, for obvious reasons, especially important in cases where there has been constructive dismissal of a senior employee.
In any matter concerning restrictions, the possibility of general law on restrictive trade practices being relevant, including any possible effects of Art 85 of the Treaty of Rome, should not be overlooked (see Passmore v Morland plc 1999 ICR 913, CA).
At a general level, it may be useful to refer to the World Intellectual Property Organisation (WIPO) web-site. WIPO is one of 16 specialised United Nations agencies. It is based in Geneva, has 179 nation states as members and administers various international treaties dealing with intellectual property protection.
See also GARDEN LEAVE , RIGHT TO WORK and IMPLIED TERMS IN EMPLOYMENT CONTRACTS/duties of employee .

[Sapphire]

Re: Contract of Employment-restriction of contacts and garden leave

Hi Henry

Sorry but I can't add anything other than has been said before, but I will ask 'do you think that the company is ok' ie are they in trouble or something ? I just think that sometimes when businesses are struggling or whatever they start doing to strangest things.

Anyways if you want to PM me the Company name, I have access to a checking service and will do the necessary checks for you and PM them back, all completely confidential of course.