Anti compete clauses in contracts

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Are anticompete clauses enforceable.

For example you are not allowed to work for 6 months at a competitor after leaving a company. That makes it 3 months notice + 6 months out of work. It is crazy that you are not reimbursed for those 6 months.
 
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Are anticompete clauses enforceable.

For example you are not allowed to work for 6 months at a competitor after leaving a company. That makes it 3 months notice + 6 months out of work. It is crazy that you are not reimbursed for those 6 months.
Is it truly no competition work within that period, or none that you have benefitted from developing a relationship with/suitability for the role specifically through interaction in your current assignment? The idea being, they want to prevent you setting things up for yourself or sabotaging your current company's position with their clients. I know that at certain times, if I had left for a role with our client (mixed team), there was a real chance it may have put the service at jeopardy. Realistically I don't think this is the sort of thing that is enforced for the sake of it, more so that they can recoup losses if your move manages to scupper them.
 
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Is it truly no competition work within that period, or none that you have benefitted from developing a relationship with/suitability for the role specifically through interaction in your current assignment? The idea being, they want to prevent you setting things up for yourself or sabotaging your current company's position with their clients. I know that at certain times, if I had left for a role with our client (mixed team), there was a real chance it may have put the service at jeopardy. Realistically I don't think this is the sort of thing that is enforced for the sake of it, more so that they can recoup losses if your move manages to scupper them.
Simply states must not work for competitior for 6 months post termination.

That could essentually mean 6 months out of work.

Guessing to recoup to losses they have to show financial loss was a result of me?
 
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Almost certain that would be treated as an unfair contract condition and would not stand up to scrutiny as would restrict your right to work which they cannot do.

The company I work for stuck them in our contracts and someone got legal advice - they were told it was unenforceable.

Done purely to scare people thinking of leaving
 
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I think your current employer would have to be able to prove losses as a result of you working for a competitor. In reality that's probably a very hard thing to prove - unless there's something obvious like a big contract being lined up and pretty much done and dusted, until you jump ship to a competitor and the contract follows.

In reality many people change jobs to go and work for their competitors. - they're either headhunted, or just familiar with the particular industry they work in. To prevent them working elsewhere would clearly be an unfair clause.

Would you stop someone working in Tesco's from getting a job at Asda?
 
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They are enforceable but need to mainly be reasonable
The first simplest consideration is does it make you unemployable.

A good example is a hairdresser, if you had a clause that said you cannot be hairdresser for 6 months post employment it will almost certainly be considered unfair and hence unenforceable.
If that said cannot be employed as a hairdresser within 3 miles of the place you worked that would likely be deemed reasonable and hence enforceable.

Its harder with more specialist roles since the obvious place you would go to is a competitor. In that case highly likely to be unenforceable and better to retain your staff.
 
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I think your current employer would have to be able to prove losses as a result of you working for a competitor. In reality that's probably a very hard thing to prove - unless there's something obvious like a big contract being lined up and pretty much done and dusted, until you jump ship to a competitor and the contract follows.

In reality many people change jobs to go and work for their competitors. - they're either headhunted, or just familiar with the particular industry they work in. To prevent them working elsewhere would clearly be an unfair clause.

Would you stop someone working in Tesco's from getting a job at Asda?
Good points but if this was the case why would anti compete clauses exist in first place
 
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Good points but if this was the case why would anti compete clauses exist in first place
To prevent damage to their own business by poaching. If you don't see how this can damage your employer, the chances are you're not in a role that it really applies to. Can you detail the role a bit more?
 
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My understanding (as a layman, but I’ve had lots of these in contracts over the years)

They can’t stop you working for a competitor, that’s completely unenforceable.

However, if you go to work for a competitor (company B) and you were in possession of information or trade secrets from your previous employer (company A) and company A could prove that you’re damaging their business, by potentially giving away details to company B then I think it can be enforceable- but only if it can be demonstrated that company A is being harmed.
 
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To prevent damage to their own business by poaching. If you don't see how this can damage your employer, the chances are you're not in a role that it really applies to. Can you detail the role a bit more?
Sorry it was more a qu about whar is the point of it if can't be enforced as to what is purpose behind it.
 
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My understanding (as a layman, but I’ve had lots of these in contracts over the years)

They can’t stop you working for a competitor, that’s completely unenforceable.

However, if you go to work for a competitor (company B) and you were in possession of information or trade secrets from your previous employer (company A) and company A could prove that you’re damaging their business, by potentially giving away details to company B then I think it can be enforceable- but only if it can be demonstrated that company A is being harmed.
would an injunction be needed? Guessing they are difficult to obtain from court?
 
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They are enforceable but need to mainly be reasonable
The first simplest consideration is does it make you unemployable.

A good example is a hairdresser, if you had a clause that said you cannot be hairdresser for 6 months post employment it will almost certainly be considered unfair and hence unenforceable.
If that said cannot be employed as a hairdresser within 3 miles of the place you worked that would likely be deemed reasonable and hence enforceable.

Its harder with more specialist roles since the obvious place you would go to is a competitor. In that case highly likely to be unenforceable and better to retain your staff.
Would previous employers not look to enforce it more in more specialist roles then? If you are a specialist off to work for a competitior challenge is much more?
 
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would an injunction be needed? Guessing they are difficult to obtain from court?

Yes, the only person who can stop you from actually working for a competitor if there is a restrictive covenant in your contract is a judge in a court.

In reality a judge is only going to rule in favour of your previous employer if they can prove that they’re being damaged due to you working for that competitor.

Judges normally take a dim view of non compete clauses, because we live in a free competitive market, so they’re only going to swing the hammer if they really need too.

The only time a non-compete buggered me up, was when the hiring company didn’t want the aggravation, they were worried about the potential exposure.

They decided to withdraw the offer because they thought the non-compete was potentially enforceable (and it was a rare set of circumstances where it probably could have been).

I was working for a consulting company, and the company where I was temporarily assigned to wanted to “poach” me as a perm for themselves, and I really wanted it.

However, in reality if a client can freely poach employees from the consulting firm, the consulting firm just becomes a buffet from which people can steal whoever they want, which isn’t really fair on the consultancy.

In that case the “thou shalt not engage with, or be employed with any restricted customer” part of the contract was applicable, and fair…. (Even tho though it annoyed the hell out of me)
 
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However, in reality if a client can freely poach employees from the consulting firm, the consulting firm just becomes a buffet from which people can steal whoever they want, which isn’t really fair on the consultancy.

It might not seem fair on the consultancy company, but it's then in their interest to make the terms of your employment more favourable - better salary, bigger pension contribution, more days off - whatever perks you favour.

It's really no different than a young footballer coming out of an academy and then being poached by a bigger club who can offer more - yes they'll get paid for transferring the player, but ultimately if it's a good player then they'll lose out on millions in the longer run.
 
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It might not seem fair on the consultancy company, but it's then in their interest to make the terms of your employment more favourable - better salary, bigger pension contribution, more days off - whatever perks you favour.

I don’t really disagree with what you’re saying, however if the consultancy took it to court I think you’d struggle to win with that argument.

Ultimately, the consultancy’s business would be harmed, via an appointment which had been set up via the consultancy in the first place.

I see it from both sides to a degree, but ultimately at the time - with the situation I referred to, a lawyer told me I’d lose and not to contest it.
 
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Would previous employers not look to enforce it more in more specialist roles then? If you are a specialist off to work for a competitior challenge is much more?

You can't say for sure. The more restrictive it feels that less likely it would be enforceable.
But the main proviso is they cannot make you unemployable or destitute, type situation.
The more specialist the role the harder it is to avoid that situation.

I work in an industry with 3 main players, as such there is always some competition for the unique roles between the 3 businesses. (There are also smaller players but generally people want to work for one of the three)
As such the unique roles are not only basically vastly overpaid, but they have long notice periods.
We recognise that a non compete would almost certainly not pass a legal challenge. As such we make sure we pay them well, offer benefits out of line with their seniority (compared to rest of the business) but the main defence is long notice periods.
Should one be leaving to go to a competitor we almost immediate put them on garden leave, so in effect we make sure they cannot be legally speaking to our customers, have access to the more confidential parts of out business etc
The one thing that is stressed really heavily is that if we become aware of any communication or work taking place during this garden leave we will sue for damages.
Since damages could easily be into millions due to the nature of the roles its unheard of of any of them breaching their garden leave conditions.

Oh the other thing we do have is a non disclosure type clause that states any specific knowledge you have received during your employ with us is and remains our property and any disclosure of use of any of that information outside our company will be considered theft of IP (intellectual property) and as such will be liable to damages.
This has been legally reviewed and deemed enforceable. This IMO is the best way to insert non compete into specialists contracts. IE it breaks down unique info, such as specifics about customers accounts etc, and general knowledge that someone of that position would be expected to know.

Damages themselves are not a defence. If I steal the best designer of engines from you to work in my business then the expectation is I will do better and you will do worse. The issue in regards damages is using the employment of that designer to try to steal my IP.
You apply the same thought process to eg a hairdresser. You can't take my customers by taking my hairdresser, but I cannot stop that hairdresser eg cutting peoples hair that were my customers, but the customer needs to choose to move, not be poached.
Hence why with the hairdresser you wouldn't try to stop them cutting hair (unreasonable), but you would try to limit the area they did so in (reasonable as long as not excessive), e.g. they cannot rent the shop next door and setup a competing business (until their non compete timing expires which is one of the other angles, the length of the clause).
 
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