rather odd no compete - enforcable?

[sammyj]

I have recently been offered a job for a business which is in semi-direct competition with my current employer. After approaching my management, they have consulted HR and confirmed they would pursue an injunction against me under the 'non compete' contract, were I to proceed with the move. Im hoping some of you here may have some advice for me on this (though I know a lawyer is probably best, just gauging some thoughts at the moment)

Ive been with the current company for about 1.5 years and am below management layer. I do interface with customers. Im UK based. As far as I know, no customers of current employer are current or prospective customers of prospective employer.

The old employer is a global tech giant based in Delaware, USA. The prospective employer is a large company but with a small presence in the b2b market (current employer has large presence in b2c and b2b markets).

My current no compete states that I can work for no competition for 1 year from termination. It also lists the geographic area as 'any country the company or its subsidiaries do business' - which is pretty much everywhere.

There is a clause which stands out as if it would be unenforceable: "if any restriction set forth [in relevant sections] is found by a court of competent jurisdiction to be unenforceable because it extends for too long a period of time or too great a geographical area, it shall be interpreted to only extend over the maximum period of time or geographical area as to which it may become enforceable"

Theres the jurisdiction clause which confuses the hell out of me. It almost sounds like they are waiving their own rights to use the UK courts and could only enforce the agreement in a court in the USA, which as far as I know has no power over me as a UK citizen living in the UK at all??

"Governing law, forum and jurisdiction: This agreement shall be governed by the and construed as a sealed instrument under and in accordance with the laws of the state of delaware. Any action, suit or other legal preceding which is commenced to resolve any matter arising under or relating to any provision of this agreement shall be commenced only in a court of the state of Delaware and the company and employee each consents to the jurisdiction of such a court."

So what do you think of this? Im hoping this is completely un-enforcable in the first place, but if its not does the jurisdiction clause mean that even if they try to enforce it, its not going to be able to happen in the uk?

thanks in advance for your kind advice!

 

[benni]

Theres the jurisdiction clause which confuses the hell out of me. It almost sounds like they are waiving their own rights to use the UK courts and could only enforce the agreement in a court in the USA, which as far as I know has no power over me as a UK citizen living in the UK at all??

"Governing law, forum and jurisdiction: This agreement shall be governed by the and construed as a sealed instrument under and in accordance with the laws of the state of delaware. Any action, suit or other legal preceding which is commenced to resolve any matter arising under or relating to any provision of this agreement shall be commenced only in a court of the state of Delaware and the company and employee each consents to the jurisdiction of such a court."

So what do you think of this? Im hoping this is completely un-enforcable in the first place, but if its not does the jurisdiction clause mean that even if they try to enforce it, its not going to be able to happen in the uk?

thanks in advance for your kind advice!

The jurisdiction clause means you have agreed that you are bound by laws of Delaware (which will be very different to the UK, I would assume especially when it comes to the question of size of damages). If they sue you for breach of contract, it will happen in Delaware and you would have to defend the case there which would be very expensive for you.

Enforcement of such a judgment is of course a different question, but just because the case was decided in Delaware does not stop the company from applying for enforcement action in the UK courts.

At least get a legal opinion from a US lawyer (preferably one in Delaware, familiar with this area of law) before you make a decision. If the threat of legal action seems genuinely an empty threat, could your new employer offer you any indemnity to enable you to take the job?

 

[internetspaceships]

My current no compete states that I can work for no competition for 1 year from termination. It also lists the geographic area as 'any country the company or its subsidiaries do business' - which is pretty much everywhere.

I believe that under UK rules this WOULD be unenforceable - however as the previous poster mentioned I would get the advice of someone who specialises in your particular circumstances - i.e. where the contract is deemed to be governed by Delaware laws.