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I have a friend who is currently going through redundancy. He works for a digital agency.

In his contract it states that the current employer would not like him to work for another agency for at least 2 months until after the final leave date.

My assumption is that this is used for client facing staff, account managers and so on. My friend is a developer (well senior but not management).

If he does find work with another agency, and that agency approaches the existing employer for references, does all of this get logged with HR (ie the company name, business type etc).

My assumption is it must do in case there are queries at a later date.

He is wondering how much of this can be done under the radar if at all.

Any help much appreciated.

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    The first thing to do here is for your friend to ask for the non-compete to be removed as part of the redundancy agreement. Mar 17 at 16:27
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    Check that contract twice: where I live, non-competes are only valid when the employee leaves of their own free will or through their own fault. Layoff is neither.
    – nvoigt
    Mar 17 at 17:26
  • Feel free to downvote this, but please offer some sort of explanation.
    – lharby
    Mar 17 at 20:45
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    @lharby Legal advice is explicitly off topic. Mar 17 at 20:58
  • Is this contract one your friend signed when he started work? Or one they want him to sign as part of the redundancy process? Mar 30 at 11:23

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Twice in your question you wrote "my assumption is". Stop assuming things. Find out what the contract actually says. Also you write "the employer would not like...". In contract law nobody cares what they like. Does the contract say your friend agrees not to work for a competitor or not?

If the contract does say they agree not to work for competitors then, as Philip Kendall says, getting that clause removed is a high priority in redundancy negotiations. It's not clear from the question whether "the contract" means one your friend already signed as part of their employment, or one the employer wants him to sign as part of redundancy. If the latter just ask to have it taken out. If the former negotiate adding a clause to the redundancy agreement that explicitly releases your friend from its provisions. He might also find out if non-compete clauses are enforceable in the UK. Start with the Citizens Advice Bureau and hire a lawyer if they can't give you a clear answer.

If the contract clause isn't removed and is valid then trying to go under the radar is a bad move. But a lawyer will give you better advice, and you will need it.

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    I've commented to this effect elsewhere but non-competes are in general enforceable in the UK, but they must be "reasonable" and not be so broad as to prevent someone from being able to find essentially equivalent employment to the role they are leaving. Mar 30 at 11:45
  • Yep. Exact wording of the non compete matters a lot. Mine agreed that I wouldn't work on a project)product directly competing with the ones I had been working on, for a specific period of time, to avoid the risk/appearance of giving away company secrets. I could certainly work on other things in the same general field, or on things in other fields, without conflict. EXACT WORDING OF THE NON-COMPETE MATTERS. As with any other contract issues, if you have concerns consider hiring your own lawyer to explain it to you. Preferably before you sign.
    – keshlam
    Mar 30 at 15:55
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In his contract it states that the current employer would not like him to work for another agency for at least 2 months until after the final leave date.

Unless they are paying him some money for those 2 months after employment, that clause can be safely ignored as no consideration could've taken place. If they tried to enforce it, they would not only be laughed out of the court and possibly the lawyers censored for bringing nonsense case forward.

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    The points listed in that link you've posted are: 1) no blanket bans 2) no more restrictive than necessary 3) legitimate business interest 4) employee's position in the business 5) no restriction on business contacts. None of those seem related to compensation. Mar 17 at 17:11
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    @PhilipKendall Becauce if you have compensation, your issue of "reasonable" is entirely resolved and you don't need to dig deeper. This was posted for your curiosity on reasonable, not on OPs.
    – Aida Paul
    Mar 17 at 17:14
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    But that doesn't mean that a non-compete with no compensation is automatically unreasonable as your answer states. I'm no lawyer but I work for a very big company with very good lawyers and I have a no-compensation non-compete in my contract; I very much doubt they would have put that in if this were as simple as you claim. Mar 17 at 17:19
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    @PhilipKendall You would be shocked what BS goes through in how big of companies into contracts. And the non compete of "cannot work for other agencies" is definitely not within reason, as op stated.
    – Aida Paul
    Mar 17 at 17:20
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    I'm pretty sure that every individual clause doesn't need compensation to be valid. As long as it's part of a larger contract where there is consideration both ways it will be allowable (on those grounds - I'm not saying anything about whether non-compete clauses are enforceable as such). Mar 30 at 12:47
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The way you worded your question makes this a legal advice question "Law regarding..." and probably why you are getting down votes. link to discussion on what's on topic

I'm not an attorney so this is informational only from executive experience.

Generally speaking in the U.S., non-competes have a very specific set of circumstances where they may be enforceable, but very generally speaking a company cannot prevent an individual from earning a living in their chosen vocation and field.

The burden on both parties would likely be needing to prove one way or the other whether the company or individual would be/was significantly harmed by the other party because of adhering to, or not adhering to, the non-compete.

If a company's non-compete says something like you can't work for any of our competitors period, globally and forever, in your specialized field of vocation and without compensation, then that could be viewed as highly unreasonable.

What if they offered $5 million in compensation? Does that it make it reasonable? What if you made $10 million previously, is it still reasonable?

How about if you went to work for a competitor in your vocation and took all of the information you gathered from the previous employer and used it for the competitor's gain. Is that reasonable for an individual to do that?

Now what about if you're a "developer" (I'll assume a full stack web developer), and you earned a degree that was not paid for by the previous employer, and there is no direct "secret special sauce" taught or given to you and even if there was you don't use it at a new competing employer...you just work as a full stack developer using skills that are not proprietary to the previous employer, that might be considered reasonable.

IF, big if, a person was actually taken to court a lot would depend on the scenario, who is in court, who the attorneys are, and proving harm one way or the other, etc, etc, etc.

If it is a worry, speak to an employment attorney familiar with the topic. For myself, I just keep everything above board and am highly cognizant of not bringing harm to previous employers (even with being self employed).

Remember, in today's litigious society anyone can sue anyone for anything, no need to give them a reason and a base for their claims.

Employees and HR managers would do well to understand the implications of their employment contracts. HR managers especially if providing advice internally to other managers.

Hope that provides some value

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  • The question is tagged "United Kingdom", so US advice is honestly not relevant here. Mar 29 at 18:45

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