Going to work for a customer - breach of contract ?

HarryD

Hi All,

I'm considering resigning and going to work for a customer of my current employer.
I know some colleagues are restricted from doing so due to a clause in their contract.
The only clause I found related to this is the following:
"For a period of 6 months after the termination of your employment with <current employer>, you agree you will not directly solicit the business of any company who is a customer of <current employer>."

1. Does this mean I can't go work for the customer immediately ?
2. If so can they really enforce it?

I heard of it been enforced before with a different company.. but not sure if they went through with it.
I also heard companies can't enforce this rule..

Any thoughts ?

Cheers,
HD.

Nody

Point 1, I'm leaning towards yes though I'd see it more in the term of you going to a competitor and luring them over or starting up your own business (i.e. stealing "their" customers).

Point 2 the answer is yes but depending on your position (i.e. a first level tech support agent could not have this enforced where as a sales manager could).

Gone West

Its possible that if they offer you the job without you soliciting it, you might be ok...

seamus

HarryD wrote: »

1. Does this mean I can't go work for the customer immediately ?

If that's the exact wording of the clause, then there's no reason why you can't go work for them.

"Solicit the business" means that after you leave the company your are not allowed to approach the customer in question in order to make them a customer of yours.

This is a fairly common clause in financial services, where an account manager moves from one company to a competitor and takes his contact list with him to try make a good impression on his first day with some big wins.

It's not meant to prevent you from working for the customer unless you are contracting for them and providing the same service that your previous company provided.

HarryD

My current employer contracts it's employees into this company.
The new position is also contracting into the company, through an agency, where I work as a contractor as opposed to a permanent position.

The position is in an area I've been looking to move into for some time, and I've been asking my employer for the last 2 years about doing some work in that field - in vain.
So is it in direct competition ?... maybe arguably..
(the contract does state 'direct competition')

Another thing to consider, is this customer is a multinational - and the only customer of my current employer. Without them my current employer is screwed.
Would my they risk pi55ing off the customer by chasing me on this ?

seamus

Well then it depends on whether or not the agency will be your "employer" or simply referring you on.

That is, if the "agency" is actually your employer, then you are not directly soliciting the business of the customer.

If the agency is simply an intermediate (like a recruitment consultant) and you will be self-employed, then yes, you are directly soliciting the business of the customer.

Gone West

Ok the company you move to might have to buy you out from the contracting agency.
Depending on the nature of the business, and the relationship between the companies.

Ya should have included that from the start.

It is also quite likely that you can simply move, but hey you're not giving enough information really for people to give you proper advice.

HarryD

seamus wrote: »

Well then it depends on whether or not the agency will be your "employer" or simply referring you on.

They will be simply referring me on, but I will get paid through them.

The nature of the business is IT.
Also the agency company contacted me independently,
and presented me with the position.
Surely this can't be described as 'soliciting the business of a customer' ?

padser

Harrry,

If you want to get some answers on this then you need to sit down and write one coherent post with all the relevant facts

1) What exactly does your contract say relating to soliciting business and working for direct competitors?
2) What is your current job?
3) What will your new set up be. IE what company will you work for and what will their relationship be with the customer/competitor of your current comapny.

Petrolium Hat

HarryD wrote: »

Hi All,

I'm considering resigning and going to work for a customer of my current employer.
I know some colleagues are restricted from doing so due to a clause in their contract.
The only clause I found related to this is the following:
"For a period of 6 months after the termination of your employment with <current employer>, you agree you will not directly solicit the business of any company who is a customer of <current employer>."

1. Does this mean I can't go work for the customer immediately ?
2. If so can they really enforce it?

I heard of it been enforced before with a different company.. but not sure if they went through with it.
I also heard companies can't enforce this rule..

Any thoughts ?

Cheers,
HD.

Get free legal advise. They will tell you. I doubt they can do anything as long as you claim the company contacted you and not the other way around. I hate to compare it to this but it's actually a decent example. In Ireland paying for sex isn't illegal, it is illegal to solicate for sex though.

mountainyman

Harry,
This clause does not apply to you. These clauses are hard to enforce in general but they can be boiled down to 'you may not build your business on your employers time'. Any broader interpretation is in restraint of trade.
You are not soliciting business.
If the customer has some clause in its contract with your current employer that is not your problem.
The agency, your current employer and the customer will have to sort it out among themselves. The problem here is that recruitment agencies can't be trusted.

growler

such non-comptitiveness clauses are very difficult to enforce in practice, in effect it's a restaint of trade and limits your right to work where you wish.

snellers

this is a common condition in sales environments but to this day I have never seen it ever been enforced. Whenever people have gone to competitors it has worked out well for them as they typically get gardening leave for their notice period (whereby they are paid during the notice period but are told they are not wanted in the office) - you cannot work for the competitor during the gardening leave period of course as you still work for the original company!

as far as I'm concerned and as many posts above you can work wherever you wish (unless of course the role is government/security issues) - I personally wouldn't worry about it - company is more concerned with you taking info from their database / costs/clients...etc

Anna23

If they want your company can get an injuction against you that will not allow you to work for the customer and some tend to do it, a good example is Claire Byrne and TV3. They can get an injuction straight away, all they need is to apply to the courts and its released straight away! But honestly I would not worry I doubt they will go though the trouble!

snellers

there will always be exceptions to the norm ...if you work in the public eye such as the example there are many other factors taken into account ....I assume the OP is working in a 'normal' environment

companies discourage all they can people moving to competitors - legally there is very very little they can do