Does Non-compete cover clients?

[JessicaHope3]

Hi All,

Looking for some advice on my current employment contract. I work for a 'consultancy' company where I am contracted with a client. I have been with the client for over a year and would like to work for them directly.

Within the clients contract with my current company they cannot 'poach' me however they would not be liable if I were to apply for a role directly myself. However, I have just found this clause in my contract:

You convenant with the Company that you will not for a period of 6 months after the Termination Date be concerned in any capacity (other than as a holder of securities as referred to in subclause 14.6) in any business which is carried on in the UK or in any other country in which the company or any Group Company operates and which is competitive or likely to be competitive with any business in which you was actively involved during the course of your employment during the Relevant Period and which is carried on by the Company or another Group Company or which is actively being considered as a potential business venture by the Company or any Group Company at the Termination Date.

As this makes no reference to what would be perceived as a competitor and doesn't mention 'clients', is it safe to say this would only stop me working for another consultancy or would it also include the current client I'm working with?

Any advice greatly appreciated.

 

[Newchodge]

Hi All,

Looking for some advice on my current employment contract. I work for a 'consultancy' company where I am contracted with a client. I have been with the client for over a year and would like to work for them directly.

Within the clients contract with my current company they cannot 'poach' me however they would not be liable if I were to apply for a role directly myself. However, I have just found this clause in my contract:

You convenant with the Company that you will not for a period of 6 months after the Termination Date be concerned in any capacity (other than as a holder of securities as referred to in subclause 14.6) in any business which is carried on in the UK or in any other country in which the company or any Group Company operates and which is competitive or likely to be competitive with any business in which you was actively involved during the course of your employment during the Relevant Period and which is carried on by the Company or another Group Company or which is actively being considered as a potential business venture by the Company or any Group Company at the Termination Date.

As this makes no reference to what would be perceived as a competitor and doesn't mention 'clients', is it safe to say this would only stop me working for another consultancy or would it also include the current client I'm working with?

Any advice greatly appreciated.

It is appallingly badly worded , and illiterate (in which you WAS actively employed). I suggest you need formal paid for legal advice about its applicability.

 

[Daybooks]

It is appallingly badly worded , and illiterate (in which you WAS actively employed). I suggest you need formal paid for legal advice about its applicability.

Also the mix of Company, being the named Company and company being any company does appear to be inconsistent or indeed throws an altoghter different meaning upon it. Presumably all the successive “and’s” mean they must all be met. Six months would probably elapse between deciphering intention and actual meaning. Not sure how an employee would know which companies might be the subject of an active interest in being a business venture of the employer Company; let alone enforceable. Another win for the lawyers – who probably drafted it?

 

[Paul Kelly ICHYB]

If worded the right way, it might be difficult to work for the other company without issues, however, as mentioned, that clause is poorly worded.

I am sure I saw somewhere that this clause, in general is a restrictive practice and may not be enforceable, but you would need to investigate that further.

 

[DontAsk]

Is the client in the same line of business? Are they in any way a competitor? Are they close by geographically?

 

[IanSuth]

It is possible/likely that the B2B contract between the consultancy you work for and the client contains an anti poaching clause, such that if you end up working there they will be due to pay a penalty clause.

That is far easier for your current firm to enforce as it is b2b and not an employment contract term.

For instance our recruitment consultancy terms used to contain the following

"In the event that any employee of the Agency with whom the Client has had personal dealings accepts
an Engagement with the Client within 3 months of leaving the Agency’s employment, the Client shall
be liable to pay an introduction fee to the Agency in accordance with paragraph 2. To be clear, if any
member of our staff is subsequently employed by a Client within this time period, whether directly
poached or not, we will seek an introduction fee as though they were an introduced Applicant."

That was demonstrably enforceable as we won a case when a consultant went to a client - but it is the client who owes money, not the consultant who can't go. It does however mean you might find you apply for a role at the client only to get somebody in legal refuse to sign off an offer - so be VERY careful to ensure you have an employment contract in writing and signed BEFORE you tell you current company

 

[dylanmarlais]

Hi All,

Looking for some advice on my current employment contract. I work for a 'consultancy' company where I am contracted with a client. I have been with the client for over a year and would like to work for them directly.

Within the clients contract with my current company they cannot 'poach' me however they would not be liable if I were to apply for a role directly myself. However, I have just found this clause in my contract:

You convenant with the Company that you will not for a period of 6 months after the Termination Date be concerned in any capacity (other than as a holder of securities as referred to in subclause 14.6) in any business which is carried on in the UK or in any other country in which the company or any Group Company operates and which is competitive or likely to be competitive with any business in which you was actively involved during the course of your employment during the Relevant Period and which is carried on by the Company or another Group Company or which is actively being considered as a potential business venture by the Company or any Group Company at the Termination Date.

As this makes no reference to what would be perceived as a competitor and doesn't mention 'clients', is it safe to say this would only stop me working for another consultancy or would it also include the current client I'm working with?

Any advice greatly appreciated.

It may be unenforceable. Need more information.

 

[dylanmarlais]

and which is competitive or likely to be competitive with any business in which you was actively involved

What “business” are you “actively involved” in? Would working for another client come within the definition of a “business in which you was (sic) actively involved”?

A court will be highly likely to interpret these words strictly and against the company. So any ambiguity is likely to be resolved in your favour.

So it may well be that the “business” you are actively involved in is your activities with the current client.

If a much wider meaning is given to the wording, it may well be that the clause will be void as being unreasonable.

The law relating to such clauses is that they are void on grounds of public policy unless they are reasonable.