Reply to: Reasonable non-compete clause?

[Old Greg]

Only if it was extremely well written, detailed and reasonable. A simple can't do this for 12 months won't fly at all. Same goes for any one really but 12 months would have to be pretty tight to stand a chance of passing the reasonableness test.

Don't write a good clause.

[Contreras]

... the Agency shall be entitled to charge a fee to the Client in the event that the Consultancy or any Representative is directly engaged by the Client or through another employment business or if the Consultancy or any Representative is engaged by a third party to whom the Consultancy or any Representative has been introduced by the Client, at any time.

That's one I'm looking at right now.

[Andy Hallett]

Has that clause in your contract be tested in court?

Against a client, yes.

I've never had to run it as far as court against a contractor.

[tractor]

...

Fair enough, I can only speak from personal expetience in respect if our contract.

12 month is deemed restraint of trade. This is why the Conduct Regs specify the periods that they do!

Has that clause in your contract be tested in court?

Doubt it, but we will see

[SueEllen]

Fair enough, I can only speak from personal expetience in respect if our contract.

Has that clause in your contract be tested in court?

[Andy Hallett]

Fair enough, I can only speak from personal expetience in respect if our contract.

[Wanderer]

does anybody have a clause that they have used for this that I can borrow and what is a reasonable length of time for such a clause (that would be reasonable and enforceable)?

14 weeks from the start or 8 weeks from the end, whichever is longer.

Add a caveat that if the consultancy company no longer has a business relationship with the client then you are free to work directly with the client immediately.

[northernladuk]

12 months is very enforceable.

Only if it was extremely well written, detailed and reasonable. A simple can't do this for 12 months won't fly at all. Same goes for any one really but 12 months would have to be pretty tight to stand a chance of passing the reasonableness test.

[TheCyclingProgrammer]

I'll bet there are other constraints that you have no intention breaking. There will (should) still be a liability clause, something like to the limit of £xxxk or x% of contract value, whichever is greater. Make sure that any clauses you add don't bypass that.

Double-checked and there is (I'm using the PCG direct MSA):

The Consultancy is not liable for any loss or damage in excess of the higher of (a) ₤100,000, and (b) 125% of the total sums payable under a Schedule, except where it may not lawfully exclude or limit liability. Each party expressly excludes liability for consequential loss or damage, loss of profit, business, revenue, goodwill or anticipated savings. Any liability or remedy for innocent or negligent misrepresentation is expressly excluded. Neither party excludes or limits liability for death or personal injury.

Went with a very simple clause that both client and I are happy with:

The Consultancy agrees that while they are providing Services to the Client and for six months thereafter they shall not directly or indirectly solicit or engage with the end client without the Client’s prior written agreement.

End client is defined earlier in the project as a very specific client.

Thanks for everyone's input.

[malvolio]

As always the test is one of reasonableness. I do Service Management which is a pretty universal, well understood process these days and doesn't really demand a deep knowledge of the client (although it helps!), so it is unreasonable to handcuff me for more than three months. However if I were an expert in some specialist software, or had specific business knowledge of a limited business area that would benefit my client's commercial opposition, a much longer period would be reasonable. If you're supplying something of your own design that they need to make their business work, then it's not about handcuffs but commercial licensing agreements where you give them exclusive use for a period and they pay you to cover the potential lost revenue from not being able to sell it to anyone else.

So you have to look at what it is you are actually protecting, on both sides.

[SueEllen]

You're right, the agency clause is close-ish but not quite right.

I'm not too worried about damages as I have no intention of going direct to my client's client but its something to bear in mind, thanks.

My current thinking is 6 months is a reasonable length of time and that it would be hard to enforce anything longer than this but IANAL.

If you are happy to do 6 months put 6 months.

You need to check whether there is a dispute resolution clause elsewhere in the contract. If there is you don't have to put an amount but you do risk them trying to get more money then what you earned for your entire contract and losing out on legal fees. So I would specify a figure.

[SueEllen]

12 months is very enforceable.

Not necessarily.

An handcuff clause must protect a real interest.

I've known people who were able to circumvent 3, 6 and 12 month clauses, and also people who couldn't.

Also the way some agencies tend to write their clauses they are particularly unenforceable especially if the client is someone like BT or Virgin Media.....

[Contreras]

I'm not too worried about damages as I have no intention of going direct to my client's client but its something to bear in mind, thanks.

I'll bet there are other constraints that you have no intention breaking. There will (should) still be a liability clause, something like to the limit of £xxxk or x% of contract value, whichever is greater. Make sure that any clauses you add don't bypass that.

[Andy Hallett]

Suggest 12 months, so it's unenforceable.

12 months is very enforceable.

[Old Greg]

You're right, the agency clause is close-ish but not quite right.

I'm not too worried about damages as I have no intention of going direct to my client's client but its something to bear in mind, thanks.

My current thinking is 6 months is a reasonable length of time and that it would be hard to enforce anything longer than this but IANAL.

Suggest 12 months, so it's unenforceable.