Contracts

Re: Contracts

Neal Palk — Wed, 12 Jun 2013 13:49:42 GMT

[quote user="Malcolm Ness"]

This is sounding like one of those "discussions" we had in primary school, "My dad's bigger than your dad AND he's a policeman"

[/quote]

Indeed so and the big city lawyer doesn't seem to have separated non-compete clauses from no-poaching ones. Everyone has said that RCs are rarely enforced and that unless there is a consideration and that the clause is fair and reasonable it is likely to fail. To make the blanket statement that none are enforceable is naive and poor advice to the OP.....................

Re: Contracts

Rob Loxley — Wed, 12 Jun 2013 13:48:57 GMT

[quote user="David Mills"]

[quote user="Neal Palk"]

[quote user="David Mills"][quote user="robloxley"]

[quote user="David Mills"]Hence why they're completely unenforceable[/quote]

They are enforceable and have been; there is case law

[/quote] Where?

[/quote]

In the courts unsurprisingly!! Before everyone criticises, rarely are two cases the same so substantive case law applicable to anything 'similar' won't cut it, but if you're really interested, here's one of the better known ones. It remains the case though that the 'restraint of trade' RCs are difficult to enforce.

Thomas v Farr plc and Hanover Park Commercial Limited 2007.

[/quote]

The law may be an ass, but it is nothing if not a precise, pedantic one so the case you quote lacks relevance to the current discussion

[/quote]

But it is a relevant reply to your assertion that restrictive covenants are unenforceable.

[quote user="Neal Palk"]rarely are two cases the same so substantive case law applicable to anything 'similar' won't cut it, but if you're really interested, here's one of the better known ones. It remains the case though that the 'restraint of trade' RCs are difficult to enforce[/quote]

I think Neal's qualifications to his reply are entirely sensible and address your criticisms?

Re: Contracts

Anthony Todd — Wed, 12 Jun 2013 13:44:06 GMT

[quote user="David Mills"]

[quote user="Neal Palk"]

[quote user="David Mills"][quote user="robloxley"]

[quote user="David Mills"]Hence why they're completely unenforceable[/quote]

They are enforceable and have been; there is case law

[/quote] Where?

[/quote]

Thomas v Farr plc and Hanover Park Commercial Limited 2007.

[/quote]

The law may be an ass, but it is nothing if not a precise, pedantic one so the case you quote lacks relevance to the current discussion, where we're talking about a vet moving within an area to another practice or setting up his/her own within the restrictive covenant 'banned' by the current contract. Unless the employer can prove (?beyond reasonable doubt) that the employee has reduced his/her business by breaking the covenant - very unlikely if moves to a neighbouring practice, possibly easier if vet deliberately and actively poaches clients, either way restrictively expensive and very difficult without a paper trail to prove - then the convenant is worthless in this instance. I've no idea (or interest) in other professions and it can't be copied and pasted. As such, the covenants can be regarded as unenforceable unless you do something really stupid like publicly try to poach clients. This advice is not my own, but from an employment solicitor friend (someone has to help them spend their ill-gotten pennies) at a large city law firm who advised me a few years ago about these. Certainly the OP sounds like they have absolutely nothing to worry about.

[/quote]

This a good example of why red stars are such a stupid illogical way of disagreeing with reasoned argument. Get rid of them Arlo!!

They're only used by folk who haven't the courage to disagree in print!!

Re: Contracts

Hannah Wynne Richards — Wed, 12 Jun 2013 12:48:29 GMT

I agree with your comments about professional behaviour deteriorating Bob Very sad

Wynne

Re: Contracts

Bob Russell — Wed, 12 Jun 2013 12:46:05 GMT

A number of years ago a practice I worked in took my predecessor right up to the Crown Court in Bristol for breaking the terms of the binding out clause. The barristers and solicitors made a packet, everyone else lost and the binding out clause was thrown out as being unreasonable!

Good manners to move practices 'nicely' but you only live once and it seems the days where professional behaviour counts for something seem to be coming to an end!

I moved well out of the area for two years before returning to set up a new practice!

Re: Contracts

Gillian Mostyn — Wed, 12 Jun 2013 12:27:39 GMT

[quote user="Malcolm Ness"]I understand that most clauses are deemed unreasonable in law - an example might be that cited by the Mostyns above - eminently reasonable people it seems from their postings but seeking to exclude from a radius of 5 miles.[/quote]

What Ian didn't say is that we had a vet move to a practice approximately a mile away. We understood her reasons and there was no animosity. The clause is there but is very unlikely to be enforced unless someone takes the p*** such as actively poaching clients. Whether the law would back us up is, I agree, in doubt.

Re: Contracts

David Mills — Wed, 12 Jun 2013 09:48:49 GMT

[quote user="Malcolm Ness"]This is sounding like one of those "discussions" we had in primary school, "My dad's bigger than your dad AND he's a policeman"[/quote]

I was aware of that, but I'm an evidence-based man, and certainly no lawyer, so just thought the opinion's basis should be expounded.

[quote user="Malcolm Ness"]I don't think that that can be claimed with any certainty other than to observe that most exclusion clauses aren't enforced because either they are badly written or no significant quantifiable loss arises from their breach.[/quote]

I beg to differ. I didn't say this initially because its theoretical law really (as I suppose all legislation is until tested by case law): there is a fundamental unenforceability of these clauses with respect to our profession because of its nature - that is, numerous small businesses often in competition with each other in towns and cities and to try to restrict someone geographically from working in the town in which they live because they decide to move jobs is unreasonable, a breach of their human rights, and as such would be unenforceable in any form. Their continued inclusion in most contracts is all to do with, as in the OP, making people think twice before moving within the same town. Whichever way you look at or reason it, the pragmatic answer, with certainty, is to ignore them if you're simply moving jobs.

Re: Contracts

Malcolm Ness — Wed, 12 Jun 2013 09:17:49 GMT

[quote user="David Mills"]This advice is not my own, but from an employment solicitor friend (someone has to help them spend their ill-gotten pennies) at a large city law firm who advised me a few years ago about these[/quote]

This is sounding like one of those "discussions" we had in primary school, "My dad's bigger than your dad AND he's a policeman"

[quote user="David Mills"]Certainly the OP sounds like they have absolutely nothing to worry about.[/quote]

I don't think that that can be claimed with any certainty other than to observe that most exclusion clauses aren't enforced because either they are badly written or no significant quantifiable loss arises from their breach.

I understand that most clauses are deemed unreasonable in law - an example might be that cited by the Mostyns above - eminently reasonable people it seems from their postings but seeking to exclude from a radius of 5 miles. I understand the "best" an employer might get away with is an area less than the next adjacent practice. Furthermore, in veterinary business clients move between practices frequently so any exclusion that is written in years rather than weeks or months will probably be deemed unreasonable.

In the very unlikely event that an employee is using privileged information obtained as part of their employment to benefit a competing business (for example, their own new next-door practice) then there are other beefier bits of law that can be applied.

Re: Contracts

David Mills — Wed, 12 Jun 2013 08:53:01 GMT

[quote user="Neal Palk"]

[quote user="David Mills"][quote user="robloxley"]

[quote user="David Mills"]Hence why they're completely unenforceable[/quote]

They are enforceable and have been; there is case law

[/quote] Where?

[/quote]

Thomas v Farr plc and Hanover Park Commercial Limited 2007.

[/quote]

Re: Contracts

Stephen Courtney — Tue, 11 Jun 2013 16:55:09 GMT

[quote user="Hannah Wynne Richards"]

I just think it's dishonest tosign a contract,when you've no intention of abiding by it

Wynne

[/quote]

I agree in principle, but how much leeway does an employee have, if they want the job? Can you strike out clauses you don't like? is there room for negotiation? I've had contacts that seemed to be all about what had to do and not do, and provided no protection to me at all, other than what the law provides. and if promises made at interview aren't kept, I don't think honesty over intentions remains relevant. It works both ways.

My current contract is so old it has very little relevance to my current role - including the binding out clause as I work in a branch that falls just outside the originally stated area.

Re: Contracts

Neal Palk — Tue, 11 Jun 2013 16:52:14 GMT

[quote user="David Mills"][quote user="robloxley"]

[quote user="David Mills"]Hence why they're completely unenforceable[/quote]

They are enforceable and have been; there is case law

[/quote] Where?

[/quote]

Thomas v Farr plc and Hanover Park Commercial Limited 2007.

Re: Contracts

David Mills — Tue, 11 Jun 2013 16:34:24 GMT

[quote user="robloxley"]

[quote user="David Mills"]Hence why they're completely unenforceable[/quote]

They are enforceable and have been; there is case law

[/quote] Where?

Re: Contracts

Malcolm Ness — Tue, 11 Jun 2013 16:33:00 GMT

[quote user="Neal Palk"]I interpreted the context of the question as that of an employee.[/quote]

So did I on first reading and I might have misunderstood but there doesn't seem to be anything written that excludes the possibility that we are talking about a franchisee or similar. I think that ACAS, in the case of an employee, would have given advice more in keeping with much of what has been said here so I wondered whether they might know more than we have been told.

I have recently had unhappy discussions with a couple of of franchisees who are not enjoying their lot and only now realising the full consequence of what they have signed up for. It will be interesting to see how the new mega-corporate will deal with situations where one of its newly acquired joint venture partners is competing head-to-head and damagingly with an existing joint venture partner.

Re: Contracts

Hannah Wynne Richards — Tue, 11 Jun 2013 14:37:50 GMT

Agreed you do have a point, in that the practice also seems to be in breach of contract.Was the promise of support in writing?

Wynne

Re: Contracts

Hannah Wynne Richards — Tue, 11 Jun 2013 14:36:12 GMT

You yourself said you signed the contract,thinking it would be unenforcable

Wynne

Re: Contracts

Kathryn Burton — Tue, 11 Jun 2013 14:30:52 GMT

I agree, but how can you know when signing the contract what your situation will be later down the line? I accepted my current job after being in practice for six months, under the impression I would be well supported, but the position transpired to be sole charge with the '4-6 year qualified vet keen to support me' turned out to be a two year grad at another branch. Having spent a year on the verge of a breakdown because I can't cope with being on my own every day running the branch, I feel it's the most sensible thing for the company and myself for me to move on. In this case it seems unfair that I would either have to not practice for six months, or sell my house and relocate my family.

Re: Contracts

Hannah Wynne Richards — Tue, 11 Jun 2013 14:17:10 GMT

I just think it's dishonest tosign a contract,when you've no intention of abiding by it

Wynne

Re: Contracts

Rob Loxley — Tue, 11 Jun 2013 13:54:37 GMT

[quote user="David Mills"]Hence why they're completely unenforceable[/quote]

They are enforceable and have been; there is case law

Re: Contracts

Neal Palk — Tue, 11 Jun 2013 13:21:09 GMT

[quote user="David Mills"][quote user="Anthony Todd"]

[quote user="David Mills"]This. It simply isn't worth the paper it's written on because it's essentially unquantifiable and any civil suit would cost more in fees than would be recouped. Ignore. Completely.[/quote]

So what are you saying? Can one start next door to you with no sanction or penalty at all?

I don't think so.

[/quote] Yes. Ring up any decent legal advice line where you actually speak to a solicitor. You can't stop someone from earning a living. Hence why they're completely unenforceable. Human rights innit. As far as I'm aware it's never been tested in case law, largely for this (and financial) reasons.

[/quote]

That's not entirely correct. It is legal, proven and tested to place constraints on work activity - BUT only for a 'reasonable' period and with suitable recompense. For example, if you quit working for me and we agree that if I pay you £x your won't take another job (or start a competing business) for Y months within Z miles...that's binding on us both. For people wanting a sabbatical or World tour for 6 months this can be quite attractive..........

Re: Contracts

Neal Palk — Tue, 11 Jun 2013 13:18:30 GMT

[quote user="Malcolm Ness"]

[quote user="Neal Palk"]Restrictive covenants are very difficult to enforce in law, costly to do so and almost never enforced for 'typical people' (the occasional very senior executive might be different!). They have to be time-bound to have any meaning - typically 6 months, maybe 12 max and usually contain some financial compensation for the 'restraint of trade'.[/quote]

Agreed but note that this is the situation for employees. If the subject has had any financial interest in the business then the situation can be very different. The current crop of veterinary franchisees (aka joint venture partners) will probably find something amongst their 200 pages that restricts their options quite severely should the wish to jump ship.

[/quote]

I interpreted the context of the question as that of an employee. An equity holder would not usually have a 'contract' (of employment) in preference to a service agreement (usually for directors)

Re: Contracts

David Mills — Tue, 11 Jun 2013 13:07:30 GMT

[quote user="Anthony Todd"]

So what are you saying? Can one start next door to you with no sanction or penalty at all?

I don't think so.

Re: Contracts

Malcolm Ness — Tue, 11 Jun 2013 09:17:55 GMT

Re: Contracts

Neal Palk — Tue, 11 Jun 2013 08:00:21 GMT

Folk have covered the salient points above. In summary:

Restrictive covenants are very difficult to enforce in law, costly to do so and almost never enforced for 'typical people' (the occasional very senior executive might be different!). They have to be time-bound to have any meaning - typically 6 months, maybe 12 max and usually contain some financial compensation for the 'restraint of trade'.

Opening up next door might just be enforceable (but why would someone do that!), but moving to the neighbouring practice would cost >£10k to enforce the clause for material loss of ??????

Re: Contracts

Anthony Todd — Tue, 11 Jun 2013 07:25:21 GMT

[quote user="Utlendigur"]Quick google... http://www.lindermyers.co.uk/are-restrictive-covenants-enforceable_751.html[/quote]

Sorry, this covers it well; forgot about the injunction although I believe, these are hard to get.

Re: Contracts

Anthony Todd — Tue, 11 Jun 2013 07:17:12 GMT

So what are you saying? Can one start next door to you with no sanction or penalty at all?

I don't think so.