[andy popp]

Does anyone have experience of non-compete clauses, either as an employer or employee? If so, could I ask a couple of questions. Happy to take it DMs.

[Paul B]

My experience is having them in a contract I signed but nothing more. I was at a specialist consultancy in engineering and I had to sign to say that if I moved on I wouldn't pass their knowledge to a competitor/others.

[remus]

I'm by no means a specialist, but it'll depend a lot on the jurisdiction you're in. In some places they're flat out illegal, in others there's limits to them and in yet more they're pretty unregulated.

[andy popp]

My experience is having them in a contract I signed but nothing more. I

Can you remember how long yours was for Paul?

[abarro81]

As I understand it, if it's UK, then length of "reasonable" non compete will depend on seniority (and, I think, potentially salary plus other things like the dynamics of the industry) - comparing with others may not tell you that much about whether yours is reasonable, unless they're in a similar position... All to be decided by a tribunal if it ever came to that... As a rough guide I get the impression 3 months might often be reasonable, 12 unlikely to be. Caveat: This is very much not legal advice!

[petejh]

I had 3 months non-compete in my contract. Mid management.

[RobK]

Think I have a 6 month one. When I signed it my employer did say "I'm not sure why we bother, they're notoriously hard to enforce".

[Oldmanmatt]

Very hard to enforce. Fairly common in my world, but I scribbled it out of my contract on this occasion. Unless you work with patented technology or systems, your knowledge is probably “generic” industry knowledge that could have been gleaned from any company in the same sector.
Not actually aware of anybody being pursued for it, even in a case where the fella left with his client list and multiple accounts.
I wouldn’t want to risk it though and I’ve been lucky enough to be in a position to refuse the clause.

[andy popp]

Thanks everyone. My daughter has just been offered a pretty generic entry level administrative position and the contract has non-compete clause that states: "for a period of two (2) years after the end of that term, the Employee will not, directly or indirectly, as employee, owner, sole proprietor, partner, director, member, consultant, agent, founder, co-venturer or otherwise, solely or jointly with others engage in any business that is in competition with the business of the Employer." First, this business operates in some pretty nebulous aspects of the creative industries so "in competition with" could be drawn very widely. And two years is clearly way above the norm people here are reporting for things like specialist engineering roles. Seems way off to me.

[abarro81]

Yes, that seems totally unreasonable. On the plus side, it being so over the top for the position probably makes it less likely they would try to enforce it and more likely they get laughed at if they do... But I think these things often rely on the employee and their new employer bottling it when faced with nasty letters threatening them, which I imagine would be no fun even if you know it's bullshit. I would try to negotiate, though that may be tricky if it's entry level. It may say something about whether this is a company you(she) want to work for though...

[teestub]

Yeah that seems like a ridiculous length for an entry level position, for ref in my field which is client facing, so their main concern is you stealing clients and taking them to a competitor, directors only have a year non-compete.

[andy popp]

It may say something about whether this is a company you(she) want to work for though...

Exactly my thoughts.

[T_B]

How big is the company and how long have they been around for? Lawyers write these contracts and the owners may or may not have had much input. I wouldn’t read too much into it necessarily with regards to the ‘culture’ of the organisation. Also, as someone else has said 2 years is unreasonable. Not quite the same but from my knowledge of selling a business to a competitor I don’t think legally they would be able to enforce that length of term. Not in the UK at least.

[spidermonkey09]

In my experience at my old job I wouldn't be in the slightest bit surprised if the lawyers had stuck that in there and the relevant people at the company were completely unaware.

I'd be tempted to not engage in negotiation, but to simply strike out the relevant line on a tracked changes document and send it back signed (if she wants the job). Wouldn't be surprised at all if there was no push back. I always found this strategy worked surprisingly well as more often than not they knew the relevant clause was taking the piss and almost everyone who signed the contract did likewise!

[SA Chris]

When I signed it my employer did say "I'm not sure why we bother, they're notoriously hard to enforce".

This - I had a 6 month one with 3 month notice period. Many people left and worked for competitors and nothing came of it. I think if you were caught out demonstrably trying to poach competitors or use IP you could come to grief though.

[remus]

It's a little out of date (2016) but there's a decent summary of the UK situation here https://assets.publishing.service.gov.uk/media/5a7f68b440f0b6230268f53d/bis-16-270-non-compete-clause-call-for-evidence.pdf

Consequently, even where non-compete clauses are found in employment contracts, they may not necessarily be enforceable, unless a court considers that the non-compete clause is to protect a “legitimate business interest” and is no wider than reasonably necessary.

Simply proving that the employer will suffer from “more competition” is not counted as a legitimate business interest. In broad terms, the courts have recognised that a legitimate business interest may include protecting trade connections (with customers, clients or suppliers) and, more generally, goodwill; trade secrets and other confidential information;
and maintaining stability of the workforce.

Such factors a court may look to when considering whether a clause is reasonable may include:
• The job and the influence of the worker
• The geographical area of any restriction
• The length of time of the post termination restriction
• The type of interest and nature of the business being protected

It should be noted that a court will consider each dispute on a case by case basis and consider the circumstances of each worker. In the UK employers and workers are free to agree the terms of an employment contract meaning that each contract will be potentially different due to each worker having a different set of circumstances. There is no set formula of whether a non-compete clause is valid and as such there is no ‘tick list’ for an employer to follow to ensure such clauses are successful.

If an employer is able to successfully enforce a non-compete clause, the employer may seek an injunction or, failing that, seek damages from the worker for breach of the covenants, or a variety of other remedies.

[Falling Down]

Two years is very excessive Andy, particularly at entry level.

I’ve had experience both ways. Once leaving to join a competitor and a client asked me to do some work within the 12 month non-compete period.  I asked said client to go to my previous employer (with whom I had a good relationship) and request a waiver of the clause. They did (with some reluctance) and all was well.

Other way around, I’ve only had a send a letter once around use of IP. More of a shot across the bow

[Dingdong]

I’ve had non-compete clauses in my last 3 jobs and they’ve never cared even though I’ve gone to direct competitors.

[Paul B]

My experience is having them in a contract I signed but nothing more. I

Can you remember how long yours was for Paul?

I can, as I have the contract to hand having had to supply it to a background checking company for the third time yesterday! The ans. is 12 months.

What's interesting to me at least is that there's also a clause in there which releases me from such things when the information has been issued publicly for instance; given that when things get complex in that niche of the industry there's a requirement for a document (statement) that details the proposed methods of analysis, any assumptions and material parameters, which we need to issue to an independent third party (effectively a competitor), the whole thing becomes a bit of a farce and seems only to apply to the IP (internal analysis spreadsheets or software) or methods I'd learnt but not yet issued.

As this was a ~5 person company, I'd state the contract didn't say anything about the company itself which was wonderful. It may simply be that it's in there on the advice of someone from way back when and has never been revisited (or certainly never tested).

[andy popp]

Thanks everyone. This has been incredibly helpful.

[steveri]

Your Googling is likely as good as mine but you also have a right to work which would tend to trump whatever the small print says. Suspect it's a clause added for key people, not regularly reviewed and not relevant to most people. I'm most definitely not a lawyer though.

I'd take a guess at anything beyond 3 months as unenforceable for most folk. They've been reviewed recently with a view to lightening - https://www.raconteur.net/talent-culture/non-compete-clauses