Can i set up the company?

tyler_d

I have just quit my job at a design company and now i want to set up my own design business but my contract states:

"In the event of your leaving the company or your employment is otherwise terminated, you will undertake that for a period of twelve months, after the date of your departure for the company, you will not be part of, join any company or associated company, which my be in competition with the company."

Is there anyway out of this?

N_Raid

A friend of mine had that in a contract for a job once. Neither of us has any legal experience or is in any way legal minded so could be totally wrong, but we figured that once you leave a company, you no longer have a contract with them. So they can't enforce something from a contract that ceases to be.
Again totally open to correction but that was our take on it.

Crea

If they want to take you to court over this they will lose.
If you are a designer their contract states that you cannot work as a designer for a year. This would be considered overly restrictive as it prevents you from earning a living in an area where you have your qualification/expertise.
I don't know why companies put these stupid clauses into employment contract.

tyler_d

Thanks for the advice.

Yeah i see what you mean N-Raid but I'm not just a designer, looking to work for someone else. I'm looking to set up my own business. They are probably afraid i will take some of their customers hence the clause.

Afuera

tyler_d wrote:

They are probably afraid i will take some of their customers hence the clause.

If you did take some of their customers then I think they would have a good case against you in court. I'd tread carefully for the first 12 months until you are no longer bound by that agreement you signed. Maybe you could work other markets/clients that would not be directly robbing business from your old employer until you reach that point?

PeakOutput

tyler_d wrote:

I have just quit my job at a design company and now i want to set up my own design business but my contract states:

"In the event of your leaving the company or your employment is otherwise terminated, you will undertake that for a period of twelve months, after the date of your departure for the company, you will not be part of, join any company or associated company, which my be in competition with the company."

Is there anyway out of this?

not a chance that would stand up in court i signed a non disclosure agreement that says ill never tell anyone what im doing at the mo but in ireland as soon as you leave the job nda's are null no matter what the time frame on the contract is...i assume its the same for everything else

Nody

PeakOutput wrote:

not a chance that would stand up in court i signed a non disclosure agreement that says ill never tell anyone what im doing at the mo but in ireland as soon as you leave the job nda's are null no matter what the time frame on the contract is...i assume its the same for everything else

Assumption is the mother of all *******. Non competition clauses are legal and have been upheld in court as long as they fall under "a reasonable time" for the position (a.k.a. a first level support clause is toilet paper where as a CEO of a multinational company...).

tn

Great thread. I've found myself in a similar sort of situation, and it's time for me to jump ship.

There are two if us that currently work for a company here in Ireland, and for the past year we've been building a website in our spare time, with plans to leave our day job and then register our company with the CRO and launch the website later this year.

The one thing I know we can't get sued for, is for both of us leaving, it's a free world and we can do what we want, right?

However, there are two paragraphs (in my contract) in particular that concern me, these run-on legal sentences are brutal as it may be looked at from a different angle:

Clause 1:
"You will, unless prevented by illness, devote the whole of your time, attention and abilities to the business of the Company during usual business hours and use your best endeavours for the promotion of its interest and welfare and shall not either directly or indirectly be engaged or concerned or interested in any business other than that of the Company without the sanction in writing of the Company."

That's grand, that's what I do everyday from 9.00-5.30, during usual business hours as I should - there's nothing there that says we can't work on my own side-project in our own personal spare time isn't there?

Clause 2:
"You agree that you will not, within one year of the termination of your employment with the Company, howsoever effected, knowingly approach, solicit for, or accept custom in relation to any products or services similar to those of the Company from any person, company or body corporate that was, during the period of your service with the company, a client of the Company."

Again, it's our own side-project, and has nothing in common with any of the sites we have built in our current day job for our company's clients. We're not taking any of the company's clients, nor do we even want to. Sure we're building a website, but how can we get sued (or an attempt at being sued) when that's what we do, we're designers/developers. The site we're building isn't even remotely close to anything we do for the current company, so I don't think they would have any sort of case here... there's nothing to stop us from wanting to leave and make our own site, as far as I'm concerned.

I'm may contact a solicitor just to make sure, but any comments on the above would be appreciated... if any of you have been through a similar sort of situation.

Cheers,
T.

subway

no one here is a solcitor, and even if they were they couldnt give you valid counsel over a public forum.

go to a solcitors and ask them to make sure your ok

gbh

I know its tempting...but you should think of what could go wrong...what if it doesnt work out and you need a reference from them in the future?

You signed the contract and that I'm sure is legally binding.

tn

subway wrote:

no one here is a solcitor, and even if they were they couldnt give you valid counsel over a public forum.

go to a solcitors and ask them to make sure your ok

Thanks subway, yeah I was kind of targeting my post to the thread starters from a few months back, to see what they thought- just even to get a basic idea that I don't think I'm doing anything wrong or in breach of contract here. Will definitely be contacting a solicitor though...

gbh wrote:

I know its tempting...but you should think of what could go wrong...what if it doesnt work out and you need a reference from them in the future?

You signed the contract and that I'm sure if legally binding.

Yeah, I have thought about that, odds are it won't go wrong, but if it does, there is a backup plan in place and I wouldn't need to use the current company as a reference anyway. To be honest, if I sit and worry about what will go wrong, I'll never get anywhere... the contract is definitely legally binding, is just figuring-out if I'm breaking anything here before approaching my solicitor...

Thanks again

subway

ive heard that a decent solicitor can laugh one of them contracts out of court for you.

i definitely think you should go for it and do your own thing, just cover your ass before you take the plunge