Started a company... issues

Diagro

Diagro

Diagro

Soldato
Joined
3 Jun 2012
Posts
11,092
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?
 
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?
 
Pretty much all employers try this non-compete nonsense but it's questionably legal, and personally, if previously you were only operating on the other side of the planet, I wouldn't be concerned, you aren't competing.
 
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?
Click to expand...
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.
 
Last edited:
Diagro said:
Do I have a problem that could arise here?
Click to expand...

No, unless you actively go after their clients. Just be careful, if you do end up with some of their clients, make sure you keep every record that they approached you and not vice versa.
 
Diagro said:
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.
Click to expand...

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.

Diddums said:
No, unless you actively go after their clients. Just be careful, if you do end up with some of their clients, make sure you keep every record that they approached you and not vice versa.
Click to expand...

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.
 
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.
Click to expand...
Would they even come after me for anything? considering the company is soon to be dissolved?
 
Diagro said:
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.
Click to expand...
Surely the company as a legal entity has therefore ceased to be, and your non-compete clause has been rendered null and void?
 
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?
Click to expand...
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.
 
dlockers said:
Let me guess - you are going to have similar clients and by marginally cheaper?

Yeah, you're boned.
Click to expand...
He works in the UK, his old company only does installs in South Africa. It's difficult to compete with a company 3,000 miles away that doesn't even offer the services OP is providing in the UK?
 
It would surely be a different matter if you’ve been made redundant, rather than choosing to leave. They can’t reasonably expect you not to work.
 
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.
 
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.
Click to expand...
Nope. I didn't do UK installs. And nore did they.
 
Diagro said:
Would they even come after me for anything? considering the company is soon to be dissolved?
Click to expand...

Something for a solicitor - if they've spun up a new company with the existing assets then it may be considered part of the IP perhaps but it would probably have weakened any claim they'd have (could well be void if the old company is now dissolved), it's going to depend on the terms in the contract and what has actually happened w.r.t this old company being dissolved and the new company formed.
 
You must log in or register to reply here.
Back
Top Bottom