Non-compete for unrelated clients?

[dystran]

Hi everyone.

I am new to the business (have read lots) and have now joined the forums. Please be gentle...

I am an new advisor/consultant with my own Ltd company. I market my supply chain advice directly to the chemicals and pharma industry.

However, another larger supply chain consultancy, selling in to all industries, wants me to help on a short term project (approx 7 days paid at a daily rate). I will be providing niche skills to try to save their client money, a client in an unrelated marketplace.

Our companies otherwise might have a few areas of overlap in terms of competition but I also offer a lot they don't and vice versa.

They have asked me to sign an joint NDA/NCA, and it is the non-compete clause (lasting 2 years after the project) that I am worried about. It reads:

[ME] also agrees not to directly or indirectly compete with [THEM] in relation to any clients that [THEM] are working with, have worked with in the past 3 years or in which projects are being progressed together between [ME] and [THEM; or use any of the Information, methods, trade secrets, marketing strategies or names of individuals or organizations disclosed by [THEM].


I know that they also have pharma companies on their books. It seems unfair that I am beholden to them for 2 years and cannot deal with who knows how many companies within my own market that they might have on their books - lapsed or not

I probably already know most of them.

Would it me fair I reject? I have no issue with confidentiality of non-compete for clients they introduce me to.

Please put my mind at rest?

[eek]

They want you, do you need the work especially with that risk?

Ask for the non compete clause to be removed otherwise you can't do the work.

[Wanderer]

Please put my mind at rest?

You do 7 days work for them and they think they own you?

Tell them that you will respect their trade secrets and intellectual property (which will be protected under law anyway) but they need to substantially water down that wording. It's just not worth it for a 7 day contract, is it.

[kal]

The cynic in me would say that they see you as a threat and are offering you a small amount of work purely to get you to sign up to that clause and therefore take you out of the picture...I would not bother.

[MyUserName]

I think you are justified in refusing these terms and conditions. Ask them to remove them, if they refuse then you have a choice to make!

[GazCol]

Would a clause like that not be classed as restraint of trade? Other than being unenforceable it’s also illegal.

[DirtyDog]

Would a clause like that not be classed as restraint of trade? Other than being unenforceable it’s also illegal.

Under English law, restraining clauses in employment contracts are enforceable if there is a legitimate interest which needs to be protected and the restraint is reasonable, i.e. it sufficiently protects the interest and goes no further.

A court could also use the "blue pencil" approach to remove words from the clause which make it unnecessarily wide, thereby leaving a valid clause which can be enforced.

If the client can prove that they have a legitimate business interest to protect, and the restraint is reasonable, and the usual rules of contract law apply, then it's a valid restriction. If they can't, then it's not.

[northernladuk]

Hi everyone.

I am new to the business (have read lots) and have now joined the forums. Please be gentle...

What's with all these namby pamby contractors nowadays? They always beg for us to be gentle. What happened to the contractor of old that was made of tougher stuff and could take it and give it blow for blow?

[eek]

What's with all these namby pamby contractors nowadays? They always beg for us to be gentle. What happened to the contractor of old that was made of tougher stuff and could take it and give it blow for blow?

They turned out to be not as hard as they thought they were.

And do you know the people responsible for this new state of affairs. Its all down to you once I toughened you up in the first place...

[dystran]

Thanks all.

I ended up being so convinced by my opinion that I responded prior to my picking up these answers.

No problem for me with the confidentiality, and my appetite is such that I would stretch to having a non-compete with those end customers that I am introduced/working with only. If I ended up in a longer support position then I might be more flexible.

They accepted it so all is well. The chap is a good guy; I think it was a case of don't ask don't get...

The above responses have been most helpful because I really wanted to sense check that I was not missing some logic.

Thank you!