Breach of Employment Contract | TV Edwards Solicitors

We can advise on the remedies open to you if you’re facing an alleged breach of employment contract, taking into account legal risk and protecting your best interests.

What is a breach of employment contract by an employee?

A breach of employment contract by an employee occurs if an employee fails to fulfil obligations set out in their agreement.

Common examples of a breach of employment contract by an employee include:

A failure to provide adequate resignation notice, as outlined in the employment contract
A failure to carry out the duties and responsibilities of the role, as outlined in the employment contract
A failure to meet post-termination restrictions (restrictive covenants), such as not setting up a business that is in direct competition with the employer

If there’s an alleged breach against you, it’s important to seek legal advice.

What can happen if there’s an alleged breach of contract?

It can be an exceptionally stressful situation when there has been an alleged breach of an employment contract, for either party. For you as the employee, there may be a risk of losing your job or having to pay financial compensation to your employer.

In circumstances where you are accused as an employee of being in breach of your employment contract, it is important to get advice as soon as possible to understand your position. Obtaining early advice can help to reduce the risk of further damage or liability.

At TV Edwards, we can guide you through this process and assist you in obtaining a fast resolution in order to minimise any damage caused.

Contact us for advice

If you’re facing an alleged breach of employment contract, we can provide the help and guidance that you need.

We can advise you on what your rights are and how to proceed.

What is a restrictive covenant?

A restrictive covenant is a clause (or set of clauses) that is incorporated into an employment contract, which seeks to restrict your actions after termination of your employment with the business.

Restrictive covenants are used for the reason that departing employees (particularly those who are senior) are likely to know the ‘trade secrets’ and confidential business operations of the business, or you may have built relationships with some of your employer’s key customers.

To protect its legitimate business interests, your employer may seek for you to enter into restrictive covenants.

Restrictive covenants ordinarily fall into one of the following categories:

Non-competition: Such clauses seek to prevent an employee from working for a competitor for a set period of time (and sometimes within a set geographical location) after termination of their employment.
Non-solicitation or non-dealing of customers: Such clauses seek to stop the employee from having contact with customers (that they had dealt with during their employment) for a set period of time.
Non-poaching of key employees: Such clauses seek to stop a former employee from approaching current employees to entice them away from the business to a new business.

Restrictive covenants will ordinarily last for between 3 and 12 months, usually depending on the seniority of the employee.

How restrictive can restrictive covenants be?

The general position, adopted by the courts, is that post-termination restrictive covenants are invalid on public policy grounds as being in restraint of trade, unless they are being used by the employer to protect a legitimate business interest.

In circumstances where an employer is seeking to protect a legitimate business interest, restrictive covenants can be a useful tool ~~to do so~~ when used in the right manner.

What would be a legitimate business interest?

A restrictive covenant must not be any more prohibitive on you than is reasonably necessary, in the circumstances, to protect the employer’s business interests. If the restrictive covenant is too prohibitive, then it is likely to be deemed unenforceable by the courts. A legitimate business interest is likely to include (but not limited to):

Customer information,
Supplier information, and
Confidential information (such as trade secrets)

Can restrictive covenants be enforced?

The enforceability of a restrictive covenant depends on the specific circumstances of each case; however, courts may consider the following factors when making their determination:

What legitimate business interest the employer is seeking to be protected. In that an employer cannot seek to restrict an employee just “for the fun of it”. An employer must be able to demonstrate that the employee’s restricted actions, if undertaken, would have a detrimental effect on the business.
What the employee’s position was within the business. In that it is likely to be more reasonable to impose greater restrictions on a senior employee, who is in regular contact with customers, as opposed to a more junior member of staff.
Whether the employee can seek alternative work in their chosen profession or industry. In that the restrictive covenant(s) must not create a “blanket” ban on the employee seeking alternative work in their chosen profession or industry, and prevent them from reasonably making a living.
Whether the restrictions are no more than are reasonably necessary, in the circumstances, to protect the business interest. In that if the restrictions are too wide, for example, if they were to seek to restrict contact with any customers whatsoever, then they may be deemed unenforceable by the courts.

Advice on breach of contract for employees

Our team is on hand to provide employment law advice tailored to each case.

We act on behalf of employees who may be facing an alleged breach of employment contract.

We understand it can be a stressful time, so we will guide you through the process every step of the way.

Can my former employer completely prevent customers from working with me at my new company?

The short answer is, fortunately, no. Whilst there are certain steps that an employer can take to decrease the risk of this (such as putting in place the restrictive covenants as outlined above), ultimately an employer cannot prevent a customer from choosing who they wish to transact with of their own free will (i.e. without any enticement from you).

If, however, you were to proactively contact your former employer’s customers and seek to entice those customers away from your former employer’s business (i.e. those customers did not determine to do it of their own free will), then it is likely that you may be in breach of one of the restrictive covenants in your contract of employment (if such restrictions exist).