Company taken over, notice period, no new contract signed

beetlebailey

Company a mate works for was taken over by another company about a year/ year and a half ago. No new contracts were signed as some details were to be clarified first.
He now has the opportunity to work for a competitor but his original contract states he can’t work for competitor for 6 months without written consent from current employer ( seems a bit excessive, it’s not a management role).
Is this still valid even though no new contracts were signed?
The new role won’t have any impact on his current employer, but they are a competitor.
Also not sure if relevant but he never received company handbook from either employer.

Is there a way around this?
Can he ask employer for written consent?
Is the original contract now void since takeover?
Although drastic, is court an option?

seamus

In a takeover scenario, the original contract continues to apply until/unless a new one is provided.

A 6-month non-compete clause is likely unenforceable and was probably just inserted boilerplate into the contract without legal advice.

Employers are allowed to have non-compete clauses but they must be limited in scope and length to provide sufficient time for the employer to protect their business interests; e.g. to assign a new account manager to clients and make sure they're aware of the change.

If an employee does not work in a position where they can provide a material advantage to the competitor, then the non-compete clause is toothless.

If he wants the job, I would advise him to just take it, don't tell anyone where he's going (he is not obliged to), and be meticulous about not contacting any clients of the former employer.

He doesn't need to go to court, the former employer would have to sue him for breach of contract. They won't.

beetlebailey

seamus wrote: »

In a takeover scenario, the original contract continues to apply until/unless a new one is provided.

A 6-month non-compete clause is likely unenforceable and was probably just inserted boilerplate into the contract without legal advice.

Employers are allowed to have non-compete clauses but they must be limited in scope and length to provide sufficient time for the employer to protect their business interests; e.g. to assign a new account manager to clients and make sure they're aware of the change.

If an employee does not work in a position where they can provide a material advantage to the competitor, then the non-compete clause is toothless.

If he wants the job, I would advise him to just take it, don't tell anyone where he's going (he is not obliged to), and be meticulous about not contacting any clients of the former employer.

He doesn't need to go to court, the former employer would have to sue him for breach of contract. They won't.

Thanks for advice,his current employer will know he’s going to a competitor as it’s related to a Business contract they lost and his employer has contacts with new employer.
I think he should take the job anyway. Thanks again

beetlebailey

seamus wrote: »

In a takeover scenario, the original contract continues to apply until/unless a new one is provided.

A 6-month non-compete clause is likely unenforceable and was probably just inserted boilerplate into the contract without legal advice.

Employers are allowed to have non-compete clauses but they must be limited in scope and length to provide sufficient time for the employer to protect their business interests; e.g. to assign a new account manager to clients and make sure they're aware of the change.

If an employee does not work in a position where they can provide a material advantage to the competitor, then the non-compete clause is toothless.

If he wants the job, I would advise him to just take it, don't tell anyone where he's going (he is not obliged to), and be meticulous about not contacting any clients of the former employer.

He doesn't need to go to court, the former employer would have to sue him for breach of contract. They won't.

Thanks for advice,his current employer will know he’s going to a competitor as it’s related to a Business contract they lost and his employer has contacts with new employer.
I think he should take the job anyway. Thanks again

whampiri

beetlebailey wrote: »

Thanks for advice,his current employer will know he’s going to a competitor as it’s related to a Business contract they lost and his employer has contacts with new employer.
I think he should take the job anyway. Thanks again

Depending on his inside knowledge and expertise, you can be sure that the current employer could get an injunction to stop him from working with his new employer until such time as the non compete period has elapsed. Not only that but if he does breach his contract, he could easily find himself paying for the injunction with costs being awarded against him.

His best bet here would be to check out if the new company will hold him to his old contract. If no, get it in writing and off he goes. If yes, then he can either do some menial job for the new employer, find something else to do for 6 months or take a chance in the employer not seeking to enforce the non compete clause.

helimachoptor

I know a case where a non-compete was "enforced", the ex-employee took the former company to court and won.

Former company knew they wouldnt win, but were sick of people leaving :pac:

Ignore what they say, if he wants the job, the current company can't do anything about it.

Jim2007

helimachoptor wrote: »

I know a case where a non-compete was "enforced", the ex-employee took the former company to court and won.

Former company knew they wouldnt win, but were sick of people leaving :pac:

Ignore what they say, if he wants the job, the current company can't do anything about it.

Ultimately the employee will probably win, but that does not mean that the former employer can't do a lot of damage along the way. For example, naming the future employer in the case would be a nice place to start.