No compete clauses

[KingMikel]

Hey guys,

I recently came across a contract which had a whole lot of affiliations then ended with "engages in or is concerned in any competitive activity within the prescribed area."

Does this mean that I won't be able to work as a security guard in Kempton Park for 2 years for example?
Will I either have to change careers or move away if I wish to resign?

Thanks

 

[Electric]

It's essentially a constraint of trade agreement.
Aren't these somewhat illegal nowadays?

 

[ToxicBunny]

They can work to a degree.. but if what you do is not specific to an employer, they may not prohibit you from plying your trade at a competitor if they do exactly the same thing.

 

[MartyMarts]

It's essentially a constraint of trade agreement.
Aren't these somewhat illegal nowadays?

That's what I thought. Have any of you heard/seen/know someone that has had a restraint of trade enforced upon them? I personally haven't.

 

[PhreeMe]

That's what I thought. Have any of you heard/seen/know someone that has had a restraint of trade enforced upon them? I personally haven't.

Neither have I, and we had some.
As far as I know the higher applicable rule is that you are not allowed to deprive anyone of a means of income, if that is there only source of providing it.

 

[GhostSixFour]

That's what I thought. Have any of you heard/seen/know someone that has had a restraint of trade enforced upon them? I personally haven't.

Yes. I know of a bunch of people that left one company to go work for their competitor. The one guy had to wait 6months before he could start working there. Although the original company paid him a salary until such time.

 

[IzZzy]

That's what I thought. Have any of you heard/seen/know someone that has had a restraint of trade enforced upon them? I personally haven't.

All the time, but that's my career.

It's essentially a constraint of trade agreement.
Aren't these somewhat illegal nowadays?

restraint of trade. And no, prima facie enforceable.

 

[MartyMarts]

Neither have I, and we had some.
As far as I know the higher applicable rule is that you are not allowed to deprive anyone of a means of income, if that is there only source of providing it.

Yip, that's how I remember it too. I initially got a bit of a hoo-haa from my previous company as they knew I was leaving them to go directly contract at one of their smaller clients. They weren't making much money off the contract so they kinda just left it.

Yes. I know of a bunch of people that left one company to go work for their competitor. The one guy had to wait 6months before he could start working there. Although the original company paid him a salary until such time.

The "denying someone a means of income" concept applied here?

All the time, but that's my career.

From your experience, what is the usual outcome in this situation?

 

[IzZzy]

From your experience, what is the usual outcome in this situation?

Well just to clarify, I draft them and our litigation partners enforce 'em.

Honestly I would say the lack of enforcement is not due to any legal reasons, but rather a weighing up of the costs to do so versus the value lost. If you are an executive etc. then chances are they will enforce it.

I structure mine by shifting all the onus of proving that it is not a protectable interest, onto the executive So it actually becomes quite easy to enforce (if structured right) and difficult to defend.

 

[GhostSixFour]

The "denying someone a means of income" concept applied here?

I assume so. He worked on a commission based job and they had to pay full salary for 6 months, so 100% comm. He was smiling, as you would when you get a 6month paid holiday.

 

[Fulcrum29]

Neither have I, and we had some.
As far as I know the higher applicable rule is that you are not allowed to deprive anyone of a means of income, if that is there only source of providing it.

That may be the rule, however the entity which employed you entrusted you with a NDA between you, them and their customer(s), also intellectual property. Now you can see where this rule may apply. Go search cases involving these scenario's detailing why the employee won in his case and where the employer won in their case.

 

[MartyMarts]

Well just to clarify, I draft them and our litigation partners enforce 'em.

Honestly I would say the lack of enforcement is not due to any legal reasons, but rather a weighing up of the costs to do so versus the value lost. If you are an executive etc. then chances are they will enforce it.

Serious business this seems to be. Thanks for the explanation.

I structure mine by shifting all the onus of proving that it is not a protectable interest, onto the executive So it actually becomes quite easy to enforce (if structured right) and difficult to defend.

How do you sleep at night

I assume so. He worked on a commission based job and they had to pay full salary for 6 months, so 100% comm. He was smiling, as you would when you get a 6month paid holiday.

I would pay for that ...6 months off AND paid. Oh man...

 

[Nanfeishen]

Hey guys,

I recently came across a contract which had a whole lot of affiliations then ended with "engages in or is concerned in any competitive activity within the prescribed area."

Does this mean that I won't be able to work as a security guard in Kempton Park for 2 years for example?
Will I either have to change careers or move away if I wish to resign?

Thanks

I could be wrong, but this sounds more like it addresses the issue of "moonlighting" at a 2nd job in the same field and area, not quite the same as restraint of trade.
Also what exactly is the "prescribed area" meant to mean ?
Physical Area ? as in a 30 km radius or area of expertise ?

 

[acidrain]

Surely non competes/restraint of trade only limits you from performing work for clients of the company you are leaving?