It really is quite staggering how many opinions are available to observe that a restrictive covenant covering a mere 75 miles is too restrictive.
For a start, there is no information in the post about the industry or location (Pete appears to work in retail, but nothing more known). If a local hair salon tried to apply a 75 mile restriction on their stylists – purpose being to avoid customers following a stylist to a new salon – that would very probably be seen as excessively restrictive; we have no idea why 75 miles is the range here, and it could be perfectly reasonable, based on the nature of the work – protecting their market in the local region really is not excessive.
Furthermore, we don’t know what compensation is provided as part of this employment to support such a restrictive covenant – it matters, as it will be taken into account by a court.
75 miles is simply making sure cannot work within travelling distance of home.
HR bods - ever seen that be enforceable?
Seen perfectly legitimate covenants covering the whole country, and there was a case once (in the shipping industry, if memory serves), that covered the globe, and applied forever – so 12 months is not necessarily excessive either.
What’s puzzling about the post/circumstances is the timing of the terms.
If the MD was attempting to get sales guys to sign a similar contract when Pete joined, why didn’t the MD simply ensure it was included as part of the employment contract for Pete? Or did they include it somehow, as would seem sensible?
When I started my employment the MD was attempting to get sales guys to sign a 'Business Protection' document as a supplement to the employment contract. The employment contract is fairly basic in that it states you can't pinch their customers. The new document states you can't work for a competitor for 12 months and within 75 miles of your home address in any business that competes in any way.
No one signed the document and the UK Sales Manager advised everyone not to sign it. I've now received an 'exit of employment' document which contains these restrictions and asking me to sign. It also states that 'Your employment by us is our consideration for your agreement to the undertakings contained in this letter'. As mentioned this wasn't in place at the time of employment and has not been signed since.
Perhaps by issuing the “exit of employment” document, Pete is being reminded that he has been bound by a contractual term for the 10 months of employment, and is being invited to confirm he is still aware of this – a convenience for all parties.
The employment contract is fairly basic in that it states you can't pinch their customers. The new document states you can't work for a competitor for 12 months and within 75 miles of your home address in any business that competes in any way.
I'm reasonably assuming I'm not bound to sign this in any way, although interestingly my sales figures relevant to annual bonus were included in the same mail to me with the exit doc attached.
I’m reasonably assuming that, given Pete has felt the need to register & post a question, Pete doesn’t really know if these terms were incorporated into the employment contract.
Ergo, I’m in agreement that Pete doesn’t have to sign anything new now. But I will observe what the terms of employment/post-employment are may or may not alter an iota whether that document is signed.
Karl Limpert
