Anti compete clauses in contracts

[Nitefly]

You have to ask yourself a common sense question: is the move going to cause significant concern to your old employer re: the sharing of competitive know-how to your new employer?

For example, a head of expansion who has sensitive commercial knowledge moving to the same position at a major competitor is understandably going to upset the old employer. These clauses can be enforceable in these circumstances, but a savvy new employer should be able to get around this by limiting engagement on certain topics for reasonable time periods in obvious ways (i.e. work in an subject area or in respect of a geographic area where the old employer doesn’t operate in the short term).

However, such clauses can of course be anti-competitive. If it’s widely drafted as a way of stopping you from leaving to a new role, then (i) there may be no appetite to enforce it and (ii) it might be found to be unenforceable. In which case, old employer might not actually take action.

Also, as others may already know the enforceability of these clauses is expected to be curtailed soonish:

Lewis Silkin - Government confirms plans to limit non-competes in employment contracts

The government has confirmed its plans to limit the length of non-compete clauses in employment contracts to three months, in a recently published response to a 2020 consultation on the topic.

www.lewissilkin.com

 

[jon86]

For example, a head of expansion who has sensitive commercial knowledge moving to the same position at a major competitor is understandably going to upset the old employer. These clauses can be enforceable in these circumstances, but a savvy new employer should be able to get around this by limiting engagement on certain topics for reasonable time periods in obvious ways (i.e. work in an subject area or in respect of a geographic area where the old employer doesn’t operate in the short term).

How will the old employer know where you're going to work next if you don't tell anyone and you get a verification of employment letter written before you leave your old employer?

My last employer was none the wiser. People asked me where I was going next and I just didn't give a specific answer ("I have a number of options - no where specific to share at this time"), plus I didn't bother to update LinkedIn so people wouldn't know from that either. Prior to leaving, I had an automated HR system send me a verification of employment letter as well.

 

[dowie]

Impossible to enforce.

[anecdote about specific scenario with an apparently easy workaround/flawed non-cmopete agreement]

The first part is wrong and is certainly not a conclusion you can draw from having had an easy-to-get-out-of non-compete clause in your particular case as that isn't necessarily likely to be the case in general.

These things can actually be enforced in the right circumstances so people shouldn't believe broad claims like the above and instead should get their specific contract and situation assessed by say a solicitor specialising in employment law.

 

[dowie]

How will the old employer know where you're going to work next if you don't tell anyone and you get a verification of employment letter written before you leave your old employer?

My last employer was none the wiser. People asked me where I was going next and I just didn't give a specific answer ("I have a number of options - no where specific to share at this time"), plus I didn't bother to update LinkedIn so people wouldn't know from that either. Prior to leaving, I had an automated HR system send me a verification of employment letter as well.

Lots of different ways if you're in a role that requires a non-compete, was that the case in your job?

For example, if you're a salesperson moving to a competitor and you start competing then you're inevitably going to end up speaking to multiple people and literally telling them where you work now... and those same people will be speaking to your old employer.

If you're moving to a client from say a vendor then people at the vendor will be in regular contact with people at your new employer and word can get out... what happens if a support ticket is raised and you're working internally on that system and get included in the e-mail chain attached to the ticket... "Oh, looks like Jon turned up at XZY client, did you know about that?". Or perhaps the old employer has people seconded at the client or account managers regularly visiting... they then see you there.

In terms of roles that actually warrant these things, where you're directly competing against the old company then it could be hard to hide that a lot of the time.

 

[jon86]

Lots of different ways if you're in a role that requires a non-compete, was that the case in your job?

I think that I have likely had it easy with non-competes due to working in tech for my whole career. I was under a non-compete two jobs ago, but the non-compete was narrow in scope and only applied to competing in an identical field, like leaving a cybersecurity company to work for a competing cybersecurity company, for example. That company that I was working for at the time eventually got bought by a larger company, and after reading all of the new employer's legal agreements, I found out that they effectively completely overrode all of the previous policies, which completely quashed the non-compete.

 

[Lopéz]

Impossible to enforce.

Had this pulled on me once early in my career, Got a stinking letter through the post about from the previous company along with a solicitor, Took it to my new boss and after a week I had a new contract to sign as senior design engineer and not design engineer. This is then classed a progression apparently and perfectly acceptable as its not the same roll. (Git never gave me a pay rise though)

Absolutely not impossible to enforce!