MattW

Scenario.

PersonA is employed as permanent employee of CoyA that supplies resource.

PersonA is currently working at CoyB who have perm role available. PersonA wishes to take role and CoyB have indicated they would be happy to have them.

PersonA's contract with CoyA states that within 6 months of leaving, unable to work for an existing customer.

Now bearing in mind that following PersonA's move to CoyB, they may no longer be a customer of CoyA, where does PersonA stand?

MarkO

You'd usually find that you'll be legally bound not to work for any company that was a customer of your own company when you worked for them, even if that business relationship no longer exits.

carl

Depends on the terms of the restrictive covenant in their contract. Usually they have to specify a geographical area otherwise they're restricting the right to work of their employee (e.g. if CoyA's clients include the majority of an industry, then PersonA will be effectively unable to work for 6 months after leaving). Restrictive covenants are rarely enforced, unless they're really well-written.

MattW

It mentions something about 100 miles, but bearing in mind CoyA is in London and CoyB in Swindon, it would mean not being able to work South of Shropshire!!

PS this is not for me, I am working for CoyB.

carl

I think 100 miles is probably taking the ****, and the covenant would never stand up in court.

I am not going to comment on the morals of CoyB and PersonA, other than to enquire why they are considering doing this apart from to save the fees they are paying CoyA?

Reffro

He ain't moving without a sutiable compensation offer from CoyB to CoyA.

The contract is set up to prohibit this exact situation, otherwise what's the point of CoyA being in business if its staff are constantly poached by its customer. It may seem harsh but CoyA has to protect its interests. The question has to be answered, would the employee been offered the job with CoyB without having worked for them previously? Answer:- Doubtful.

This employee either has to work out a compensation deal to suit CoyA or go do something else for 6 months and then come back to CoyB. I can't think of any other options.

PS I am just this minute going through a similar situation, and thems the breaks, I agreed to the restrictions when I signed my contract and I'm happy to honour them, but then I'm not much of a mercenary barsteward



[Edited by Reffro - 7/30/2002 4:50:37 PM]

MattW

I am comfortable with the morals.

CoyB wish to hire a permy, but continue with the contractor position (which could be filled by anyone with the relevant skills). CoyB want to hire PersonA because they have demonstrated the skills CoyB require to be a good employee, plus they have been contracting for 12 months and will not require more training. There is no money saving, as there will still be a contractor position available.

PersonA wants the job because the security of CoyA (60000 employees) compared to CoyB(5 employees) is better, and they like the working environment.

MattW

Maybe, they interviewed very well, just at the time CoyB could n't justify commiting to a permy.

I see what you are saying, hence the question, just looking for some real life experiences, not looking to shaft CoyA, more to help PersonA achieve their ambition.

carl

OTOH, you could argue that CoyA would want to retain Person A for exactly the same reasons.

Consider CoyA's point of view -- they have invested money in training, etc. for this person, and they have also taken the risk when they took him on (he might have been crap) so they believe they deserve the reward. Would they have spent that effort on him knowing he was going to be poached by a client? Sure they can supply another contractor, but with 5 employees it's likely they'll have to recruit and take the risk again. CoyB's risk is zero -- they already know PersonA is suitable, and if PersonB (CoyA's new person) is crap they can tell CoyA that he's unsuitable and demand someone else.

If you take it to its logical extreme, would you be happy with CoyB continually taking staff from CoyA after 12 months and insisting the contract position is replaced by a new person?

[Edited by carl - 7/30/2002 4:38:06 PM]

beefola

As far as i know, if neither company has any objections, and you get that in writing, there isn't a problem. That is unless you currently deal with sensitive material, which they don't want at the other company. Ask, its the only option.
Beef

carl

But asking introduces another problem. What if CoyA doesn't agree? The relationship between CoyA and PersonA has now been soured, probably to the detriment of PersonA.

MattW

Thanks for the replies, confirmed what we thought.

MarkO

Why not just do it? As has been mentioned before, these clauses are almost impossible to enforce, and if there's no longer a business relationship between the two companies, who cares?

Sheepsplitter

I think you will find that all clauses of this nature are now illegal under European law.
There was a famous case about 2 years ago where some footballer took his club to court (they were trying to stop him working for another club in 6 months or something like that). The court ruled it was 'restrictive practices' and let the transfer go ahead.

It's highly unlikely that it would ever get to court though, unless it was for big money (like football) :-)

I've been told by legal people that generally the court will always side with 'the little man', i.e they will not let the company use bully tactics to stop someone changing jobs.


Of course a lot of this I got through hearsay, you might want to consult a lawyer about it all (I think it's about £60 for the first hour).