Hi Ozbargain,
I am looking to leave my work soon and have been advised that I cannot apply at a certain company due to a non-solicitation agreement; which apparently prevents me from seeking employment there. For context, I work for a contractor and do contract work for a larger company and have the knowledge to move onto the new company. Is this legal? I would have assumed it stopped the company from poaching me and not me from applying at other places.
In my situation, I am looking to apply at a customer of ours, the clause states specifically:
"Without the Employer’s prior written consent, from the date your employment ends, you are not to solicit or attempt to solicit business from any Customer for the Restraint Period."
What if I was to want to apply for a job with the customer, the customer is a completely different business so it is not a competitor per se, as I believe the below clause would apply, and I plan to get legal advice.
"Without the Employer’s prior written consent, from the date your employment ends, you are not to undertake any paid work for a Competitor for the Restraint Period."
Have you already worked at the company you're applying for as a contractor? - This is the only scenario where I would be worried. Otherwise it seem like a load of rubbish, how can an employer control what you do after you leave the company just because.
Interesting case study about Channel Ten offering a job to the CEO of Channel Seven - http://www.surrypartners.com.au/post-employment-restraints-w…
Two main points relevant to this thread.
The starting point, as far as the law is concerned, is that contract terms are meant to be observed. However, regardless of what the parties may have agreed to, Courts will not enforce a restraint on an employee where the restraint is not necessary for the reasonable protection of the legitimate interests of the employer, or anyone else for whom the benefit of the restraint was agreed.
Warburton’s case serves as a reminder that the enforceability of post employment restraints is entirely dependent on the individual circumstances of each case. However, given that in general only the most senior members of an organisation’s management have access to commercial sensitive information, restraints targeted at employees outside of that group will not be enforceable. All in all, the enforceability of a restraint comes down to what it is that the individual knows and whether there is a real possibility that that information could be used to harm the former employer.
I almost exclusively do contract work for the customer and my knowledge would give me a leg up in getting employed, I have had a chat with Legal Aid and will be referring my case to an employment contract firm. In the meantime, thanks for the advice, it is very helpful in trying to build my case in finding future employment.
So you basically want to cut out the middle man? I think this is why those agreements exists. I would respect your current employer and wait the agreed time before trying to seek employment there.
I am starting to lean that way too.
The main reason for moving is career progression, there is no chance of growth at the current company (same position for 4 years) whereas at the more established firm, I will have opportunities.
If you were taking customers with you to the new employer you don't have a leg to stand on. If it's just you moving into a role where there is really no loss to your current employer (besides the cost of you leaving) then it's really just a threat that costs a lot to enforce.
I think (im not a lawyer so its my 2c):
"Without the Employer’s prior written consent, from the date your employment ends, you are not to solicit or attempt to solicit business from any Customer for the Restraint Period."
I would interpret this to mean becoming employed directly* by one of their customers is not soliciting business from them.
"Without the Employer’s prior written consent, from the date your employment ends, you are not to undertake any paid work for a Competitor for the Restraint Period."
A competitor would be in competition with the company you are currently working in and not include being employed directly* with one of their customers.
*meaning: You become a Permanent employee. Contracting would be another matter and you would likely breach your existing contract.
It seems like it would be worth discussing the matter with a contract lawyer or maybe asking for the employers written consent.
Would definitely be seeking permanent employment.
I am on good terms with the employers, the only issue would be that the customer has previously poached an employee in my position before, should I be worried about any other agreements outside of my employee contract?
i.e. a poaching/solicitation agreement between my employer and customer, would this prevent me specifically from applying at the new company.
Just been reading your other comments, that does sound like a really complex situation.
The benefits to the customer seem to mean that your position where you are wouldn't be needed to the same extent. It could mean the company you are contracted to will lose business/revenue from the customer.
But I have heard of contractors becoming permanent with related companies reasonably often. Sounds like you are on the right track checking with an employment contract firm. Nothing worse than being in a 'dead-end job' and your career progress should be yours to control.
The thing is, there is essentially no loss of business/revenue as I have been in talks with my current employer to train up new guys to take my position, currently it looks like everything should remain the same, the only loss of revenue would be that 2 people will be taking my position instead of 1 also as I will not be directly doing the same work I was doing, rather managing work above the contractor level.
Your last paragraph gives me hope, looking to speak to a lawyer today and get some more information.
It has felt 'dead-end' for a good 2 years now.
(c) “Competitor” means any business engaged in the Telecommunications industry within a radius of:
i) 25 kilometres from the workplace of the Employer in which you were employed;
Is that too broad of a definition to enforce? I mean any business engaged in the Telecommunications industry, literally means I can't get a job in my industry for the stipulated amount of time. So my options would be to go back to school and get a new degree or work something else for a while before I can start applying again.
Would the following be able to applied in my situation?
"An employer is not entitled to protect itself against the use of the skill and
knowledge which the employee acquired during his or her employment. Those
belong to the employee, who must be free to exploit them in the market place.
Neither can an employer seek protection from competition per se, since it is against
the public interest that employees should be deprived of the opportunity to earn their
living or to use their personal skills to the ultimate benefit of the community as a
whole: Herbert Morris Limited v Saxelby [1916] AC 688."
But the below clause worries me.
"The concept was further developed by Lord Wilberforce in Stenhouse Australia
Limited v Phillips [1974] 1 All ER 117, who said:
"The employer's claim for protection must be based on the
identification of some advantage or asset inherent in the business
which can properly be regarded as, in a general sense, his property,
and which it would be unjust to allow the employee to appropriate
for his own purposes, even though he (the employee) may have
contributed to its creation".
In other words, the employer is entitled to prevent the employee taking unfair
advantage of confidential information and business connections to which he had
access in the course of his/her employment."
that's interesting
I thought the rules applied only for those who are actual employees not contractors that aint even directly employed by the company (u work for a contractor)
prolly should look at ur contract, that's a interesting condition to place in a contractor, but then again I've never been a contractor!
my friend did work for a big 4 auditor and was poached by old boss and was told his contract said he cant work for them, but they never sued.
Chances are unless ur a CEO or someone high up, or knows very sensitive company details, they wont care
Hmm, so my situation is, I work for a company that does contract work. I am a full time permanent employee.
I do contract work pretty much exclusively for 1 client (largest).
Sort of 2IC and run the whole client by myself. Not CEO material per se, but have all the knowledge my company possesses.
I am starting to lean towards trying to obtain written consent, only reason I don't think this will work is the director expressly acknowledged that I shouldn't apply for the client as they had poached previous employees. Which leads me to believe they have an agreement in place, would that be for poaching or would it include receiving my applications for employment?
hmmmm so do you want to work for the company you are contracting out to
or a rival company?
if it is the company ur contracting out to, it happens all the time, ur boss is prolly pissed off that they lose business and have to retain staff
also did your boss said you cant leave or the company you working for
read your contract, also try to contact say a recruiter and ask for their opinion!
It would be a company that we contract out to.
That would be true but I don't see them losing business from me leaving.
Boss said that I can't be poached, i'm just unsure if I'm allowed to apply for a position.
The thing is your company might have a contract with the customer that they cannot employ you without a payout.
Depends on how much the customer like you and how much they are willing to pay. It might be that the customer is giving your company so much other business that your boss dare not piss them off and simply let you go.
My understanding is that if you have been placed there by your current work, you won't be able to work directly for the new company for 6-12 months depending on the agreement. Otherwise you could just undercut what your company is charging and still make more money working directly than you would with your current salary. I'm not a lawyer but I would think that's legal.
On the other hand I have also seen agreements where it states you can't work for competitors for 18 months just because (i.e. no logical reasoning). Basically what I'm saying is just because it's in your contact or whatever doesn't mean it's legal. Get actual legal advice to really understand where you stand.