The Right To Work And Anti-Competition Agreements

Anti-Competition Agreements In The News
There has been much discussion in the UK media lately about a plumbing company suing a competitor. In summary Mr Cosser set-up a business called Service Corps with 5 plumbers that used to work for a rival firm called Pimlico Plumbers. Each plumber got a 10% stake in the business. There is also talk about a certain Stephen Hennessey breaking an anti-competition clause in his employment agreement with Pimlico Plumbers when he took up a job with Service Corps.

Anti-Competition Clauses In General
I would like to talk about anti-competition clauses in general now. There might be a place for them for directors on high salaries and company founders that then sell their companies. However it seems in the past decade that putting anti-competition clauses in employment contracts has become more and more common. These prevent people from working for a competitor for anywhere between 6 - 12 months after leaving their job.

The fact is that many companies that use them don't do research and don't invest in employee training to any significant extent. Using them for relatively low-paid employees at the bottom of company hierarchies isn't appropriate. What can be considered competition depends on opinion. If you work for a large company with many products or services, then you can be effectively barred from working in your chosen profession for 6 months. This will be directed at people that effectively live from monthly pay-cheque to pay-cheque and can't afford to have 6 months off from work.

There really isn't a free market for employees to chose employers without anti-competition clauses, because they are getting so common. It is unlikely that a graduate fresh from university that has spent weeks to months interviewing at tens of companies will risk his/her job offer being rescinded by arguing over the terms of the employment contract. Interviews are getting longer and longer. Three separate visits to a company's offices for a job interview are commonplace. If you obtain a job offer via a recruitment agency, the agency may tell you in order to get a formal offer of a job, you have to reject all your other job offers. In this way you only see your employment contract after you have given up your ability to negotiate for a better deal.

If you ask a recruitment consultant about anti-competition clauses when going from one job to another, you might be told that they aren't enforceable. So why bother to fight over an employment term if you are told it can't be enforced? Is this correct advice?

The most danger from anti-competition clauses isn't their enforcement, but rather self-policing. Once I saw a job description from a start-up company saying that any candidates that have signed anti-competition clauses should not apply for the job!

The UK government should pass a statutory law giving UK citizens the right to work in this country and this law should override any contract terms to the contrary. California has such a law.

A contract term doesn't have to go anywhere near a court to have its effect. Threatening, bluff letters from lawyers can do their damage. Most people don't have the time or money to fight issues in court and so will back down.

A company laying off workers coupled with a sleazy lawyer won't lose any sleep over threatening former workers with court action for little more than trying to work. The fact that they don't have any work to offer is beside the point. The whole point is bullying and that everyone should be in the mud together.