Work contracts- Area Clause, Advice please

Re: Work contracts- Area Clause, Advice please

Rob Loxley — Tue, 22 May 2012 15:58:13 GMT

[quote user="David Mills"]There hasn't been a single case, and there never will be[/quote]

Your World Recruitment Ltd v Woodhouse and others [2011] All ER (D) 69 (Jan)

QBE Management Services (UK) Ltd v Dymoke & Others [2012] EWHC 80 (QB)
http://www.bailii.org/ew/cases/EWHC/QB/2012/80.html
In particular para 208 onwards covers the application by the courts of such clauses.

I fairly much agree with David that a former employer will have a hard time to satisfy the courts to apply post-termination restrictions to an ex-assistant. If you've run off with a copy of the client list ("trade secret") that's another matter... I can however imagine that a big corporate that buys your practice will have lawyers on your tail when you open up shop down the road soon after!

Re: Work contracts- Area Clause, Advice please

Malcolm Ness — Tue, 22 May 2012 11:20:49 GMT

The situation is very different depending on whether you are an employee without a financial stake in the business (in which case you can do pretty much what you want once you have left and any attempted restriction on your freedom to trade would almost certainly fail) or a former partner/ director in which case such clauses can be enforced effectively (Senior partner retires, sells business to juniors then continues to trade with the same clients he has just "sold" is an obvious example). An interesting recent development (and as far as I know something not yet tested) is the status of partners in joint venture partnerships or those employees, former partners of a practice bought out by a corporate.

I know of a couple of cases over the years where leaving employees have been pursued legally but in those cases things were complicated by the "suspicion" that information gained in the previous practice (eg booster reminder lists) was used to kick-start the new venture.

Re: Work contracts- Area Clause, Advice please

Hannah Wynne Richards — Tue, 22 May 2012 10:57:39 GMT

Depends what is there to lose A highly respected long standing employee setting up for him/herself across the road would be worth stopping Someone going to work part time for a huge conglomerate where he/she would be only 1 of several veterinarians,and at the friges of the exclusion area wouldn't

Wynne

Re: Work contracts- Area Clause, Advice please

Bob Russell — Tue, 22 May 2012 09:30:07 GMT

[quote user="David Mills"]

[quote user="Mark Holmes"]

[quote user="David Mills"]

They're completely unenforceable in law.

[/quote]

I understand a lot depends on the circumstances. If you sought to leave employment they can be interpreted differently to enforced redundancy.

[/quote]

There hasn't been a single case, and there never will be because, in contract law, they are meaningless: you cannot prevent someone from working in a geographical area who is no longer under your employ. The only time people appear to bring them up is when people take clients or part of the name. There is nothing to say that anything in contract has to be enforceable; most contracts have them as merely a deterrent. Admittedly, aggrieved ex-employers may try to invoke them afterwards but this comes under the same category as those wild claims you read about in the VDS newsletters with weasly-worded solicitor letters from solicitor or paralegal chancers

[/quote]

An ex-employer took this action against my predecessor (many years ago). It went all the way up to Bristol High Court. It has happened but I cannot see the point in filling the pockets of solicitors and barristers with so little to gain!

Re: Work contracts- Area Clause, Advice please

plantagenet — Tue, 22 May 2012 08:31:24 GMT

[quote user="David Mills"]paralegal chancers[/quote]

Do you mean people who offer firm legal opinions, who do not have legal qualifications?

Re: Work contracts- Area Clause, Advice please

David Mills — Mon, 21 May 2012 18:24:22 GMT

[quote user="Mark Holmes"]

[quote user="David Mills"]

They're completely unenforceable in law.

[/quote]

I understand a lot depends on the circumstances. If you sought to leave employment they can be interpreted differently to enforced redundancy.

[/quote]

Re: Work contracts- Area Clause, Advice please

Mark Holmes — Mon, 21 May 2012 15:32:02 GMT

[quote user="David Mills"]

They're completely unenforceable in law.

[/quote]

I understand a lot depends on the circumstances. If you sought to leave employment they can be interpreted differently to enforced redundancy.

Re: Work contracts- Area Clause, Advice please

David Mills — Mon, 21 May 2012 15:16:40 GMT

They're completely unenforceable in law.

Re: Work contracts- Area Clause, Advice please

Bob Russell — Mon, 21 May 2012 14:21:22 GMT

I would hope the governing factor will be based on morality rather than law. As said above these clauses are a legal minefield and the only winners are the lawyers!

Most of these binding out clauses seem pretty unenforceable in reality.

I suspect I would be more likely to behave myself if I had been treated well by a practice. My decision as to where to start up my own practice ten years ago was more driven by family requirements than by choice!

Re: Work contracts- Area Clause, Advice please

Hannah Wynne Richards — Mon, 21 May 2012 12:00:06 GMT

I think it what would be deemed reasonable to protect the original practice-so distance would vary according totype of practice-3 miles reasonable in inner city-not if a hill farming practice. I would alsoexpect a court to enforce more strictly if someone was setting uptheir own practice compared to someone who would be just 1 among many employees in another already established practice

Wynne

Re: Work contracts- Area Clause, Advice please

Mark Holmes — Mon, 21 May 2012 11:41:35 GMT

Mt understanding is that it can be enforced but only if reasonable restrictions have been applied. 3 miles and 6 months would be potentially reasonable 10miles 2 years might not. I think it also comes done to the potential damage that you cause. Open a practice across the road and I would expect to get a solicitors letter, possibly wrapped around a brick!

Re: Work contracts- Area Clause, Advice please

Mark Hedberg — Mon, 21 May 2012 08:27:41 GMT

It's a civil issue, not a criminal issue. They can bring suit against you, but to be honest it often costs more to bring the suit than the actual damages they may or may not have suffered, so it's not really worth their time to enforce it.

Re: Work contracts- Area Clause, Advice please

Rob Loxley — Mon, 21 May 2012 00:36:25 GMT

Yes (with caveats).

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