Started a company... issues

Diagro

Diagro

Diagro

Soldato
Joined
3 Jun 2012
Posts
11,086
Hey,

I started my own company yesterday, with the plan on doing a similar thing to what I was employed doing prior to being made redundant.

I've checked my old contract, and there is a non compete clause for 12m post employment.

However, the previous company, only did installations in south africa. I however, plan to ONLY work within the UK.

Do I have a problem that could arise here?
 
jaybee said:
Non compete clauses aren't always enforceable/legal. They can say what they want, they can't control your life after you leave a company. You can do what you like. Whether it would be worth them pursuing you for competition and actual loss to them by you making a start-up targeting the UK would be up to them to determine whether it is financially viable. If you use knowledge/clients gained from that company to then open up business opportunities (and they can prove it) then that could be something they could look at. It all sounds unlikely though. Did you leave on good terms?
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I've already landed a client, who did approach them first, but was turned down as they did not feel it worth the candle. However, for me it's likely to be a 250k contract followed by 50k per year license fee (plus was in UK).
I left on good terms, and what's more important, is the company has just gone into administration. (big con really as they still trade under a new company name)

I won't worry about it.
 
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dowie said:
Don't be too blase, I'd at least pay for an initial consultation with a solicitor specialising in these matters.

I've had a few jobs with non-competes and the general advice I've received has been that they *can* be enforcible but they need to be reasonable and that includes things like; their duration, their scope (inc geographical) and how senior you were*/what access you had to confidential information etc.

Also whether you re-signed one upon promotion is a funny one; if they lumbered you with an excessive one as a junior and don't make you re-sign upon promotion then it can remain invalid even if it would now have been reasonable for a senior employee.



That's reasonable advice to avoid poaching but it's not necessarily going to cover him - *if* the non-compete is valid then any dealings with their existing clients may be prohibited regardless of who approached first.

Conversely, if he was unaware some firm even was a client, the approach wasn't the result of existing contacts from his prior work or confidential client lists etc.. then it's less egregious and a court might be fine with it.

The impression I got from a solicitor was that courts seek to balance not restraining people's ability to carry out their trade with the protection of legit business interests, IP etc.

He should really let a solicitor look at the whole thing with the context of what his position was and what info he had access to and then he can go through some scenarios of what may/may not be allowed.
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Would they even come after me for anything? considering the company is soon to be dissolved?
 
MissChief said:
Surely the company as a legal entity has therefore ceased to be, and your non-compete clause has been rendered null and void?
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Well, it still exists. However, the managing director has spun up a new company... and transferred all assets and staff to it.
Then put original company into administration. I expect to avoid paying debts etc.
 
Jokester said:
The only issue I can see with this is, did you do UK installs for this company and they are now not doing them since you've left?

If the previous company is totally defunct due to being closed down then there wouldn't be an issue, and I think if the company has been asset stripped and placed into administration and is no longer trading I don't think a court would think a non-compete clause is reasonable in that case either - IANAL of course.
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Nope. I didn't do UK installs. And nore did they.
 
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