Covenant in a workplace contract preventing you from working for a direct competitor for 6 months

Scooby 1975

Hi Can anybody tell me if a contract of employment which states that you cannot work for direct competitor for at least six months after termination of employment by the employee is enforceable through the courts.

Taking into consideration that this company has already allowed a previous employee to go and work for this direct competitor without any challenge at all even though it stated in the employee's contract that they could not work for a direct competitor and the employer knew where they were going when they handed in there notice. Does it matter that the company is picking and choosing who to enforce the terms and conditions with or does the contract trump everything if they choose to enforce it.

The company has chosen to remind another person who wants to leave and work for the same direct competitor that these terms are in there contract and the company will look to enforce them. That is why I am curious. Sorry if its a bit longwinded.

afatbollix

I spoke to a solicitor as I had it in my contract and they said it was unenforceable in my case.

They have to have a time limit and be very specific.

It would cost alot to take you to court, It would also take a year or two to get infront of a judge.

What would the judge say after 2 years? You must now quit your 2 year old job?

Now if they put you on gardening leave for 3 or 6 months thats up to them to pay you for that time and you can't work for your new employer.

Apiarist

No, as far as I know, this is not enforceable. They can offer you a paid vacation at the end of your contract with a condition that you won't be working for the competitor while the company pays you. Or they can make you a non-executive director, then you can be prevented from working for a competitor. I am not a company lawyer though!

But as soon as your contract is over and they stop paying you, they have no say in what you do.

Allinall

If you sign a contract with an exclusion clause in it, why wouldn’t it be enforceable?

You agreed to the condition in the first place.

How it is enforced is a different question.

Apiarist

Examples:

https://www.addleshawgoddard.com/en/insights/insights-briefings/2024/employment/navigating-non-compete-clauses-in-employment-law---ireland2/#:~:text=Restrictive%20covenants%20are%20contractual%20terms,in%20which%20they%20were%20employed.

Quote:

In April 2024, in Creganna v Cullen [2024] IEHC 231, Creganna, a medical device company, sought an interlocutory injunction to enforce a non-compete clause against its former employee, Mr. Cullen, from joining a competitor, Lake Region Medical. The Court's decision to grant the injunction was based on several factors: the clause's reasonableness, the necessity to protect Creganna's business interests, the balance of convenience, and the adequacy of damages for both parties. The Court concluded that maintaining the status quo pending a full trial was pragmatic, with Creganna's willingness to continue to pay Mr. Cullen's salary as a factor in its decision.

Net Affinity Ltd v Conaghan [2012] 3 IR 67 illustrated the importance of geographic and scope limitations in non-compete clauses. The Court deemed the non-compete clause in Ms. Conaghan’s contract void due to its overly broad scope. However, it granted an injunction to protect confidential information retained by Ms. Conaghan, preventing her from breaching her duty of confidentiality and restraining her new employer, from soliciting Net Affinity's clients. 

So the company should make it worthwhile for you. Of course, generally, you cannot take trade secrets or poach customers — however, this is true irrespective whether there is a non-competitive clause in your contract.

Jim2007

https://www.boards.ie/discussion/2058407199/covenant-in-a-workplace-contract-preventing-you-from-working-for-a-direct-competitor-for-6-months

Yes contrary to what some people believe, they can be enforceable, depending on the circumstances and your specific contract, what is in outer people's contracts or how employers choose to enforce them is entirely for them to decide. If you were going to break such a contract, you'd be well advised to seek legal advise.

There seem to be to different approaches taken by employers - some spatter them in to every contract and for the most part they are meaningless and can't be enforced. Where as other employers take legal advice and only including them in contracts where the employee could to serious commercial damage and these most definitely will be enforcable.