Restraint of Trade

[Alm1986]

Hoping someone can offer some thoughts before we take legal advice.

My husband has been offered a new job paying considerably more money than his current. His current contract has a restraint of trade clause preventing him from working in the same (niche) market for 6 months.

Both my husband and the potential new employer accept this, and the new employer has made a second offer to employ my husband on a 6 month FTC in a different role in a different company away from the niche market, (no overlap at all). At the end of the 6 month contract my husband could then take up employment in the niche role without any legal implications.

His current employer is claiming this is still unacceptable as the new employer owns a business in the niche market. I want to know if he has any grounds for his concerns?

My husband and the new employer wholly accept he cannot do anything in the niche market for 6 months and he will not be connected to it for that period. (They both see it as an opportunity to cross train in another business which he could then potentially assist in, in the future if required.) He won't have a contract with them or be paid by them. Surely this means he is not breaking the terms of the contract?

Any thoughts are welcome as until we can seek legal advice we cannot seem to forget about it.

Thanks

[FunkyBoldRibena]

What does the wording actually say?

[Alm1986]

Thanks for replying. Wording as follows:

Upon termination of your employment with this company you shall not work for any other business which operates in the niche market, within a 10 mile radius, for a period of 6 months from termination.

Company two which the new employer owns is not connected as a business to company one (the niche business) other than having the same MD. Trade totally independently, have separate company registration etc, different premises.

[GrowlLikeMargeSimpson]

Definitely get legal advice, his prospective new employer would probably be willing to pay for a specialist solicitors letter to the old company stating that he will be employed by x company in y industry and that while x company is wholly owned by z umbrella company it does not have any work in common or staff cross-over with w company which is in the niche industry and also wholly owned by z umbrella company.

TBH, my understanding of restraint of trade clauses is that they are difficult to uphold. AFAIK it is not possible for a person to sign away their ability to earn a living. Almost all the people that I know that have been subject to these clauses have been given gardening leave at full or partial pay from the original company for the period of the clause. I've known a few people with these sorts of clauses and none of them have had any more trouble than a few terse legal letters. Having said that, some of them simply took a job in same industry in another country and told their original company to get stuffed.

[GrowlLikeMargeSimpson]

Also, I'm pretty sure that if the old employer were going to sue they would have to prove that your DH was working in the niche industry, which obviously they wouldn't be able to do if he genuinely wasn't. The burden of proof would be on them, your DH wouldn't have to prove anything. They would also (I think, but I'm not sure) have to show that they suffered some financial loss as a result.

[HermioneWeasley]

The only way the previous employer can enforce this is by taking him and/or new employer to court to get an injunction, which is sounds unlikely to be granted.

Agree, write back and state why the restrictive covenant is not relevant and then let them pay thousands trying to get an injunction (which they are very unlikely to do)

[Alm1986]

Just wanted to say thank you to those who replied.

We have seen the solicitor now and are happy to proceed with the new job offer. Confident there is no case.

[GrowlLikeMargeSimpson]

Great, I hope your DH enjoys his new job.