Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

In this article we have a look at:

  1. What is a non-compete clause?
  2. What could a non-compete clause mean for you?
  3. Can you escape from the effect of a non-compete clause?
  4. What should you do if you are bound by a non-compete clause?

What is a non-compete clause?

A non-compete clause is a contractual clause (conventionally contained within the contract of employment) which seeks to prevent former employees from working for ‘competitors’ of their previous employer.

These clauses are common in work-related contracts, whether these are contracts of employments or contractors’ agreements. We will focus in this article on how non-compete clauses affect, or attempt to affect, employees leaving their employment.

What could a non-compete clause mean for you?

If there is a non-compete clause in your contract of employment then it might prevent you from working for another company which is, or might be, competitive with your employer for a certain period of time after your employment terminates.

Whether you will as a matter of fact and law be bound by a non-compete clause in your contract will depend upon a number of criteria including, but not limited to, the following:

  1. Does your (previous) employer have a legitimate business interest which requires protection?
  2. What is the non-compete clause trying to achieve?
  3. Is the non-compete covenant no wider than is reasonably necessary for the protection of the employer’s legitimate business interests?

The courts have traditionally viewed non-compete clauses as “the most powerful weapon in an employer’s armoury” (Patsystems Holdings Ltd v Neilly [2012] EWHC 2609 (QB)) but have recognised that other types of protections (such as confidentiality clauses and non-solicitation clauses) may not be sufficient to protect an employer’s interests.

A non-compete clause is normally likely to be enforced in particular circumstances (please note that this list is not exhaustive):

  • It might not be possible to protect a legitimate commercial interest (such as, for example, a particular manufacturing process) through confidentiality terms
  • An employee’s influence over customers or suppliers might be so great that the only effective protection would be to ensure that they are not employed by a competing business for a period of time post-termination

Can you escape from the effect of a non-compete clause?

Whether you will be bound by the terms of a non-compete clause will depend on a number of factors, including:

  1. Whether your employer has a legitimate business interest that it is attempting to protect;
  2. How the non-compete clause is drafted and the effect that the non-compete clause seeks to achieve;
  3. Whether the effect of the non-compete clause is, in all the circumstances, reasonable, taking into account a variety of factors including (but not limited to) how ‘broadly’ the clause is worded; the geographical scope of the clause; and the duration of the clause

Generally, the more limited the effect of the clause (in terms of its geographical scope, effect, and duration), the more likely the clause is to be enforced by a court. However, the court will also look at the following factors, among others:

  1. The seniority of the relevant employee when they entered into the contract;
  2. What period of notice the employee is bound by;
  3. What confidential information the employee had access to;
  4. What other clauses the employee is bound by under the contract of employment (for example, confidentiality clauses, non-solicitation clauses, non-dealing clauses, non-interference clauses etc.)

What should you do if you are bound by a non-compete clause

If you are bound by a non-compete clause then you should normally take the following steps:

  1. Carefully analyse what clauses you are bound by under your contract of employment;
  2. Keep copies of the contracts that you are bound by, as well as any other relevant evidence (emails with your employer, text messages, notes of meetings etc.);
  3. Seek legal advice from a specialist legal adviser;
  4. Show the non-compete clauses to any new employer during the period of the restrictions (particularly if they are likely to be a competitor of your previous employer);
  5. Respond promptly and fully if you are threatened with legal action – burying your head in the sand will generally make the situation worse

About

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees Call 020 3397 3603 to speak to one of the members of our employment team or email us on enquiries@redmans.co.uk. Redmans have offices in Richmond, Chiswick, Hammersmith, Fulham, Kingston, Wimbledon, Ealing, Kings Cross and Marylebone (meetings strictly by appointment only).

Tagged with →  

Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

Share →

Our awards

Request a callback

    Your first name (required)

    Your last name (required)

    Your email (required)

    Your telephone number (required)

    Brief details of your enquiry

    Testimonials

    4.79 Average

    277 Reviews

    Siriana B

    Thorough, efficient, and always available to answer my queries. It was a pleasure to deal with.Thanks

    Posted 3 days ago

    Anonymous

    Excellent speedy service

    Posted 3 days ago

    Robert

    Excellent service, very professional. would definitely use again.

    Posted 1 week ago

    Mary B

    I was very happy with the work Chris did for me. I believe with his help I secured a more favourable outcome both financially and in terms of clauses contained in the legal agreement I ultimately signed. I had utmost trust and confidence in the advice Chris provided throughout. Chris kept me informed at every stage and I found him very efficient at bringing matters to a conclusion without unnecessary delay.

    Posted 1 week ago

    Mark M

    I found Redmans very easy to work with. Mel was very responsive, her advice led to an improved settlement. . Recommended.!

    Posted 1 week ago

    Anonymous

    Fantastic service. I would recommend Redmans to anyone who needed a Solicitor. The communication was second to none and consistent clear guidance was given.

    Posted 2 weeks ago

    Anonymous

    Everyone I dealt with at Redmans were professional, empathetic & always responded promptly and helped make the transition as smooth & efficient as possible for me. If you need legal advice, don’t hesitate & contact the team.

    Posted 2 weeks ago

    Anonymous

    Sacha was incredibly helpful and professional. Timely and accurate advice at a time I most needed it. I was extremely impressed and grateful.

    Posted 2 weeks ago

    Sue W

    The people at Redmans talk to you with respect and make you feel like they take your situation personal. They clearly care and are extremely professional. I have recommended Redmans to many people.

    Posted 1 month ago

    Anonymous

    Redmans Solicitors were consistently prompt, efficient and professional from the start of my reaching out to them for support in relation to contentious negotiations of an employment matter that continued for almost two months resulting in a positive settlement agreement. Chris Hadrill was diligent, thorough, empathetic and objective in his advice and guidance, showing deep and broad knowledge of the law and legal processes plus extensive practical experience in handling complex matters, resulting in clear and pragmatic advice in ambiguous circumstances that resulted in a very good outcome. I fully recommend Chris Hadrill and Redmans Solicitors! I have made this review anonymous purely because of the confidentiality obligations in the settlement agreement concluded.

    Posted 2 months ago

    Michelle W

    Redmans solicitors provided legal support and advice for a settlement agreement. Excellent customer service, very professional. The senior associate solicitor kept me updated throughout the process, showed empathy and the agreement was signed-off / completed within the agreed timeline.

    Posted 2 months ago

    Mark W

    Redmans Solicitors were extremely professional and helpful! Chris Hadrill handled my case and was an amazing help! His guidance, advice and understanding to my redundancy settlement were always clear, concise and very helpful and I am very grateful to him, and glad I found Redmans to help with my settlement. I highly recommend them!

    Posted 2 months ago

    Alison M

    Very happy with the advice I received

    Posted 2 months ago

    Margaret A

    I found everything about the company to be extremely professional and efficient. During my initial contact with Chris, he listened well and was reassuring, so I felt confident that my case would be well handled. Caroline was excellent at explaining all the legal points and answering my questions, as well as being very supportive and understanding throughout the process. I would definitely recommend this company.

    Posted 2 months ago

    Sanja K

    Very efficient and professional service.

    Posted 2 months ago

    Anonymous

    I found the advice I was given by Redmans Solicitors to be clear and useful and found the solicitor on my case to be both knowledgeable and approachable.

    Posted 2 months ago

    Karen T

    Great service. Thank you.

    Posted 2 months ago

    Anonymous

    Excellent service from Chris & Mel Chin. The best outcome was achieved from the redundancy process. They were extremely thorough, listened carefully and acted swiftly on my behalf. I highly recommend Redmans Solicitors

    Posted 2 months ago

    Shanine M

    Excellent service, thank you so much!

    Posted 2 months ago

    Anonymous

    I found Caroline and Chris very Helpful and provided excellent service. Caroline especially provided great legal advice and made me feel at ease with the whole process. I would highly recommend them. Thank you!

    Posted 2 months ago

    Gayle B

    Excellent company very professional would definitely recommend

    Posted 2 months ago