Given 1 months notice with pay if i sign a 3 month no work covenant?

[stom244]

Hi All,

I have been given one months notice with pay, as per my contract but have been asked to sign a three month covenant (Which I have) that states I cannot work within the same industry until three months and one day have passed.

ACAS thinks that if I did work for a competitor within the three months my previous company would have to show loss of potential earnings to pursue me.

I don't think they would have the appetite for this but it could happen.

My question is - Is there any precedence any one knows of for this sort of situation?

I am starting my own business with similar technology but with a product they are not marketing. Waiting 3 months will drive me mad.

Any thoughts / assistance appreciated.

Tony

[nemesis45]

Re: Given 1 months notice with pay if i sign a 3 month no work covenant?

Hi, welcome .

This is a common requirement in so " competition/product/customer base" jobs.
Will you be trading within 3 months.

ACAS is correct on provable loss, approaching the ex employers customer base would be a different matter.

nem

[stom244]

Re: Given 1 months notice with pay if i sign a 3 month no work covenant?

Thanks for your reply.

Yes I want to trade within the 3 months. (Garden leave is not for me).

If I wanted to earn money for the three months I would have to find a temporary job, knowing I was giving it up. Seems a bit crazy.

My contacts would be new, but within the same (Vaguely) industry.

I suppose it comes down to the owners appetite to pursue me. (Hes Chinese and live in Beijing)

Tony

[nemesis45]

Re: Given 1 months notice with pay if i sign a 3 month no work covenant?

Hi Tony,
Keep a low profile and make sure that you don't infringe in any way on theirs business.
Is the employer insisting on this covenant, and is it clearly laid out in your contract of employment?

nem

[dan_1207]

Re: Given 1 months notice with pay if i sign a 3 month no work covenant?

A non-compete clause is not legally enforceable unless it is reasonable. I'm surprised that the NCC wasn't written into your contract, but the wording of it is important. Could you tell us, word for word, what it was that you agreed to? I'm assuming here that it is a non-compete, rather than another form of restrictive covenant, but it does depend on the wording.

The starting point is that restrictive covenants are on the face of it, void. However, they may be upheld if the employer can show them to be reasonable. Reasonableness is determined in two stages: firstly whether there is a legitimate business interest to protect, and then secondly whether the clause extends no more than is reasonably necessary to protect that interest.

Legitimate Business Interest

The main legitimate business interests which an employer may be entitled to protect are:

1. trade connections
2. goodwill
3. stability of the workforce; and,
4. trade secrets/confidential information.

‘Trade connections’ includes an employer’s clients, suppliers, employees, and may also potentially cover an employer’s previous and future clients, such as a client the employer has been working to try to secure the business of and that the affected employee was heavily involved with.

Reasonableness

Having established that there is a legitimate business interest to protect, the next condition is that any clause which seeks to protect these interests must extend no more than is reasonably necessary.

I highly doubt that your covenant to avoid working in the same "industry" for three months would be considered reasonable. The same product, maybe, but not industry. It's simply too wide.

[ukracer]

Re: Given 1 months notice with pay if i sign a 3 month no work covenant?

Hi All,

I have been given one months notice with pay, as per my contract

Are you being sacked or did you ask to leave??