Started a company... issues

[tom_e]

As others have said I'm not sure how a contract with a registered company that is soon no longer to exist could be enforced.

Just because the new company is basically the old one in everything but name doesn't mean they can enforce another company's contracts I wouldn't have thought.

Obviously this is just a reasonable assumption but it would seem strange if they could.

 

[dlockers]

I won't be working with similar clients.
I'd also be 50% cheaper

If your clients aren't the same I wouldn't worry at all.

 

[IC3]

If your clients aren't the same I wouldn't worry at all.

This was my understanding of non-compete, it only really applies if you were to do any type of work for the same clients you interacted with in the previous company within the time period mentioned in the contract, usually 12-24 months.

 

[dowie]

This was my understanding of non-compete, it only really applies if you were to do any type of work for the same clients you interacted with in the previous company within the time period mentioned in the contract, usually 12-24 months.

No, that's way too narrow.

A big issue for non-competes is going to work for a competitor, that doesn't necessarily entail working for the same clients at all, (it can cover people who don't have any contact with clients at all) rather simply things like perhaps you've got knowledge of your previous employer's IP etc.

Also, 12 - 24 months could easily be considered way too long but that depends on your role, seniority and things like what exactly is covered and in what geographical areas.

For someone who isn't a manager or senior IC then above 6 months could be deemed too long - for example a 12 month non-compete was deemed ineligible here:

High Court Rejects Attempt to Enforce 12 Months Non-competition Covenant

Patsystems Holdings Limited v Neilly serves as a reminder of the need for careful drafting of restrictive covenants and the benefits of conducting regular revi…

www.doyleclayton.co.uk

• The 12 month non-competition covenant should be considered as the “most powerful weapon in an employer’s armoury”. 12 months was a significant period of time in which to keep an employee out of the market in his chosen field and, in this case, it went further than was reasonably necessary to protect Patsystems’ interests;
• The 12 month non-competition clause was void and unenforceable from the time it had been entered into in 2000. Mr Neilly had been a junior salesman in 2000 with limited access to confidential information and minimal client contact;
• When Mr Neilly was promoted in 2005, the variation of his contract had not brought the void non-competition covenant to life, even though by 2005 he was more senior and there had been a change of circumstances. Since the covenant was void in 2000, a fresh contract with a valid covenant should have been signed on promotion in 2005

Perhaps if they'd made him sign a new one upon promotion they could have been covered but getting a junior salesperson/account manager to sign a 12-month non-compete when earning a new grad salary of 35k in 2000 is a bit different to the more senior position he was 10 years later when he left and was earning 200k, would have been in more high-level meetings, would have had access to way more confidential info perhaps etc.