Restraint of trade being forced on resignation

M

momo786

Well-Known Member
Joined
Mar 7, 2009
Messages
313
Hi All

So after being with my employer after 6.5 years, I decided to resign for various reasons.

Now they saying I must sign a restraint of trade. My employment contract states that I can't disclose their IP, and that if I become involved with a competitor, I can't deal with our clients for 3 years. Below that it states that the restraint is limited to IP and clients. I'm more that happy to comply with these 2 conditions. No mention of not being able to work for a competitor or clients (although the clients contracts states they will not employ staff of our company).

So now they want me to sign a long letter, stating that I can't work for a competitor for 2 years after leaving the company.

I told them this amounts to a variation of my contract which I don't agree to, and that they can't force me to sign, and that I'm not comfortable to sign it. I also mentioned that restraints are signed at the start of employment, not at the end. My notice period ends next week, so I know they will bring it up again.

What are my options? Can they force me to sign or withhold my salary if I don't sign?

Legally I know they won't have anything to stand on if I don't sign, but they like to play dirty and might just make things difficult by taking this to court, even if there's little chance if them winning.

What would the appropriate response to them be when they bring this up?

Thanks in advance!
 
Mila

Mila

Honorary Master
Joined
Nov 11, 2008
Messages
54,969
They can't force you, but if they are serious they can pay you with full benefits to travel and holiday for two years.
And if they offer this it might be wise to get legal or HR council.
 
R

Replay

Executive Member
Joined
Jun 11, 2014
Messages
6,569
My cousin had a similar clause in her employment contract but couldn't work for a competitor for 3 years

....and that if I become involved with a competitor, I can't deal with our clients for 3 years.
Click to expand...

She thought they didn't have a foot to stand on after accepting a job offer with better benefits from a another competitor.
The competitor knew about the restraint but said she shouldn't worry...they'll back her. Her company found out who she was going to work for and threatened to sew her and them........The competitor backed out and pulled their job offer back.
Now she's unemployed and quite screwed.....with two kids
 
F

Frikkenator

Expert Member
Joined
Aug 23, 2006
Messages
1,801
Don't sign it, and they're not allowed to keep any money you're due because of it.
 
f2wohf

f2wohf

Honorary Master
Joined
Apr 15, 2014
Messages
15,157
Don't sign except if you get paid extras for it and you are willing to sign.
 
F

funkzar

Well-Known Member
Joined
Dec 25, 2007
Messages
254
A restraint of trade agreement comes with an equivalent pay-off. It can be done at the conclusion, but at their major cost.
 
G

goga

Well-Known Member
Joined
Jun 17, 2007
Messages
113
momo786 said:
Hi All

So after being with my employer after 6.5 years, I decided to resign for various reasons.

Now they saying I must sign a restraint of trade. My employment contract states that I can't disclose their IP, and that if I become involved with a competitor, I can't deal with our clients for 3 years. Below that it states that the restraint is limited to IP and clients. I'm more that happy to comply with these 2 conditions. No mention of not being able to work for a competitor or clients (although the clients contracts states they will not employ staff of our company).

So now they want me to sign a long letter, stating that I can't work for a competitor for 2 years after leaving the company.

I told them this amounts to a variation of my contract which I don't agree to, and that they can't force me to sign, and that I'm not comfortable to sign it. I also mentioned that restraints are signed at the start of employment, not at the end. My notice period ends next week, so I know they will bring it up again.

What are my options? Can they force me to sign or withhold my salary if I don't sign?

Legally I know they won't have anything to stand on if I don't sign, but they like to play dirty and might just make things difficult by taking this to court, even if there's little chance if them winning.

What would the appropriate response to them be when they bring this up?

Thanks in advance!
Click to expand...

You've pretty much covered it. They're introducing a variation, this is a resignation - not slavery.
You're free to resign i.t.o the contract, you're complying with the restraint in the contract (assuming you genuinely are complying..), point that out to them and let them know that you're not willing to sign any further restraints as it was not part of the conditions of employment. And hopefully part ways with these clowns.
 
Novel

Novel

Well-Known Member
Joined
Nov 8, 2010
Messages
156
They f%$cked up from the very beginning. They were supposed to get you to sign before they employed you. Now its too late, don't sign unless if they're willing to compensate you.

I'm no lawyer but I think you have the upper hand on this 1.
 
O

ozziej

Senior Member
Joined
Jul 22, 2009
Messages
718
goga said:
You've pretty much covered it. They're introducing a variation, this is a resignation - not slavery.
You're free to resign i.t.o the contract, you're complying with the restraint in the contract (assuming you genuinely are complying..), point that out to them and let them know that you're not willing to sign any further restraints as it was not part of the conditions of employment. And hopefully part ways with these clowns.
Click to expand...

Agree with this. They cannot force you to sign an addendum to your contract. Ignore it.
If they try to withhold your final salary, just politely inform them that they are violating basic conditions of employment.
I worked for a real clown that tried this. Take them to dept of labour. It's free, they cannot involve lawyers, and they WILL rule in your favour.
A company cannot enforce a restraint that would make you un-employable.
For example, a doctor cannot be forced to work as a plumber because of a restraint. He is a doctor, that's his expertise and profession, you cannot stop him from doing that.
However, as long as you comply with the clause of not contacting their clients or using their IP you are safe. It's also up to them to prove if they think you are violating it.
 
dualmeister

dualmeister

Honorary Master
Joined
Oct 15, 2005
Messages
51,583
As others have mentioned the company cannot change your terms of employment know. This should have been included in the beginning. Don't do it. And if they withold your money go straight to the CCMA.
 
Hemi300c

Hemi300c

Honorary Master
Joined
Dec 15, 2009
Messages
26,417
Unless paid for specifically a restraint is not valid. If it's not in your original letter of appointment it's worth less. They are asking you to sign a contract connected to your employment contract and changing the terms therein and therefore are obliged to give you 3 months to agree.
 
N

noxibox

Honorary Master
Joined
Apr 6, 2005
Messages
23,348
It's fairly worthless even if signed at the beginning of employment. I've seen some South African companies even try to claim the restraint payment is part of the monthly salary. These guys really like to push their luck. As others have said they can't interfere with you being employed and earning at least much as your current salary. If that means working for a competitor then it is tough luck to your former employer.

They definitely cannot unilaterally amend your exist employment contract and they can't force you to agree to any changes.

Replay said:
My cousin had a similar clause in her employment contract but couldn't work for a competitor for 3 years

She thought they didn't have a foot to stand on after accepting a job offer with better benefits from a another competitor.
The competitor knew about the restraint but said she shouldn't worry...they'll back her. Her company found out who she was going to work for and threatened to sew her and them........The competitor backed out and pulled their job offer back.
Now she's unemployed and quite screwed.....with two kids
Click to expand...
She should certainly being a complaint against the former employer, and if employment had already been agreed with the new employer then against them too. Her former employer had no leg to stand on in fact and was blowing hot air to intimidate her. Nail the bastards and expose their business practices.
 
S

semaphore

Honorary Master
Joined
Nov 13, 2007
Messages
15,246
I had a restraint of trade, I ignored it and my previous employer knew I went to the competition. They didn't do anything, then I poached another guy and brought him over. It was baie snacks.
 
You must log in or register to reply here.
Top