Can my last employer stop me taking a job? - Paul Doran Law

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Can my last employer stop me taking a job?

Can my last employer stop me taking a job“Can my last employer stop me taking a job?”

If you’ve been dismissed from your previous employment, you might think you can take the first job you’re offered. But that might not be the case. As with many legal situations, it depends on the contract that’s in place at the time.

What does your contract say?

When you joined your last company, you will have been given an employment contract – you might know it as your ‘terms and conditions’ of employment. If you were a director, you might have had a director’s service agreement. If your past employer made any changes to your contract while you worked there, you would have had to agree to them in writing.

When you left that company, you might have accepted a settlement agreement (or compromise agreement in Northern Ireland) – that’s another contract.

Check your contract and look for a section headed ‘Restricted covenants’ or ‘Post-termination restrictions’.

In that section, your last employer might say:

The restriction might only last for a certain amount of time, or apply within a selected geographic area.

If your written contract doesn’t mention anything like this, or if you only had a verbal contract, you can accept whatever new job you’re offered.

Why might a restrictive covenant apply?

Working at your past employer probably gave you insight about the business which gives you a competitive edge, especially if you were in a senior, highly skilled, or customer-facing role.

It would be vital to your past employer to protect their business information or customer relationships, so restrictive covenants are quite normal in this situation.

Restrictive covenants are more likely if your job meant you had access to trade secrets, confidential or competitor-sensitive information, or if there’s a risk you might take customers, suppliers or staff with you to your new job.

Instead of working your notice before you left your old company, you might have been put on garden leave. This means you’d receive full pay and benefits but you didn’t have to go to work. Employers sometimes do this:

Note that your employer can only put you on garden leave if it’s expressly stated in your contract.

Types of restrictive covenant

There are four main types of restrictive covenant:

The period of time each restriction applies could range from three months to one year, depending on your level of seniority.

Let’s look at each of them in turn:

As you’d imagine, a non-compete clause prevents you from working for a competitor or setting up a business that competes with your past employer.

These clauses can be difficult to enforce, as your past employer would have to prove that your new work would lose them business. Much as they might want to, no company can’t forbid the idea of competition altogether.

A non-solicitation clause prevents you from soliciting clients, customers or contacts of your past employer – that means you can’t approach those people with a view to moving them to your new employer, no matter how close your personal connection with them has been.

A non-dealing clause means you can’t have any contact at all with any clients, customers or contacts of your past employer. It doesn’t make a difference whether you approach them, or they approach you.

This type of clause is more likely to be upheld if it only applies to clients you’ve had ‘material dealings’ with in the past 12 months, say, rather than all clients, ever. The clause will be hard to enforce if it attempts to prevent you from dealing with relevant business contacts while not affecting your past employer’s business.

A non-poaching clause prevents you from inviting your former colleagues to join you at your new employer or startup business.

This can also apply when your new employer has recruited a whole team from your ex-employer.

Are the restrictions reasonable?

Your past employer can’t stop you getting a new job (or starting a new business) out of malice.

Any restrictive covenants must therefore be ‘reasonable’. That means they should be designed to protect your past employer’s ‘legitimate business interest’ and prevent them from losing money. They must be able to justify the restrictions they want to put in place.

Restrictions that are unreasonable might include:

An unreasonable restriction would be void and unenforceable.

Here are some more examples:

If your past employer imposed a restrictive covenant without your express consent, and you felt forced to resign as a result, you might be able to make a claim for constructive dismissal – however, these cases can be hard to win, so it’s best not to resign without taking legal advice first.

If your past employer terminated your employment and reemployed you on different terms that now include a restrictive covenant, you might be able to make a claim for unfair dismissal – your employer will have to prove they did it for legitimate business reasons.

What can you do?

If you’re facing a restrictive covenant, there are various options – we can help with any or all of them, as required.

We are employment lawyers who only ever act for employees. We specialise in helping employees get a fair deal.

1. Negotiate your way out of it

Your past employer might not understand exactly what your new job entails. When you explain that it doesn’t impact their business, you can try to get the restriction removed or reduced.

To help get the result you want, you’d need to understand what aspect of the business your past employer is trying to protect through the restriction. For example, you could reassure them that you:

2. Negotiate with your new employer

Your new employer might agree to be flexible until the restriction expires. For example, they might allow you to delay your start date, arrange for you to do different work for a while, or base you at another site to start with.

3. Ignore the restriction

If you ignore the restriction, your past employer can take you – and your new employer – to court, in order to prevent you from doing your new job.

In England, Wales and Northern Ireland, this is known as an ‘injunction’. In Scotland, it’s called ‘interdict’.

If they win, here are some of the things they can do:

Legal action would cost your past employer time, effort and money, so they will only go down this route if it’s in their commercial interests. However, if they do, you’ll need legal support (we can provide that for you). You’ll also need to collect detailed written evidence to back up your case, so it’s wise to keep copies of everything that’s relevant.

Related reading

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May 5, 2022 at 1:31 pm
Category: Blog, Miscellaneous, Settlement & Severance

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