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If your employer says you can't work for a competitor

This advice applies to Scotland

When you leave a job some employers will say you can’t work for a similar business for a certain amount of time. They could also say you can’t set up a business that competes with theirs.

Your employer might want to limit what work you do next if you could take their customers or if you know confidential information.

Your contract might restrict what work you can do next, but your employer can only do this if it’s needed to protect their business. If there’s nothing in your contract you can take any job you like.

Check if any restrictions apply to you

Look in your contract or terms and conditions of work for wording like ‘You can’t work for a competing business if it’s less than 10 miles away’. It should also say how long the restriction lasts - usually 3 to 6 months.

Restrictions like this could be under a heading that says ‘restrictive covenants’ or ‘post-termination restrictions’.

You’ll usually have to follow restrictions like these if they’re written in your contract. This includes restrictions in any other documents you’ve signed, such as a deal to settle a dispute with your employer.

You can work for whoever you like if there are no restrictions in any documents you’ve agreed to

If you’re not sure about something in your contract, talk to an adviser. The adviser will usually need to see your contract.

If you don’t have a written contract

It’s very hard for your employer to claim a spoken agreement includes a restriction on who you can work for. These restrictions have to be precise and specific, so it’s unlikely you’ll need to follow one that isn’t written down.

Look at whether the restriction is reasonable

No matter what’s in your contract, your old employer can’t stop you taking a new job unless it could lose them money. For example if you might:

  • take customers to your new employer when you leave
  • start a competing business in the same local area

If a restriction would stop you getting a job that didn’t affect your old employer, it might not be reasonable. A restriction might also be unreasonable if:

  • lasts more than 6 months - unless longer is normal for your job title or industry
  • applies in places where your old employer doesn’t do business - such as if it mentions a whole region but all their customers are from 1 town
  • applies to jobs that don’t compete with your old employer - for example if it says you can’t take any sales job, even selling different products
  • means you wouldn’t be able to find a job at all

Negotiating with your old employer

You might be able to persuade your old employer to ignore a restriction, or at least make it shorter. To make you follow it they’d need to go to court to prove the restriction is reasonable. This is time-consuming and can be expensive, so they might prefer to compromise.

Start by explaining why you don’t think the restriction should apply. Explain why your new job won’t harm their business. They might have misunderstood what your new job is or where you’re working.

Make it clear that you’ll honour any other restrictions in your contract, such as confidentiality, or not approaching former customers. This can help show that you won’t be harming your old employer’s business.

If you’re not sure why your employer wants you to follow the restriction, ask what business interests they’re trying to protect. You might then be able to find ways round that problem. For example, if they’re worried you’ll take their customers, you could reassure them that you won’t.

If you’ve had more than 1 job with your employer

Whether a restriction is reasonable depends on your job title and responsibilities when you signed your contract - even if your job has changed since then.

For example, if you’ve been promoted, your employer can’t argue that the restriction is reasonable based on your new, more senior role. The restriction has to be reasonable based on your original role when you signed the contract.

If you had a junior role when you agreed to the restriction, mention this to your employer. You might not have had much customer contact or access to business information at that point, so the restriction might not have been reasonable.

If your contract also has limits on dealing with former customers

Restrictions on dealing with former customers should only mean customers you dealt with personally. You can still deal with customers you didn’t meet in your old job.

Your contract might say you can’t directly approach former customers, but that you can do work if a former customer approaches you. This is called a ‘non-solicitation clause’.

Or your contract might say you can’t do any business with former customers at all - even if they approach you. This is called a ‘non-dealing covenant’.

Ask your old employer if they’ll let you ignore the limit on who you can work for. Reassure them that the limits on dealing with former customers will be enough to protect their business. It could be unreasonable to limit who you can work for as well.

Negotiating with your new employer

If your old employer won’t compromise, you could also ask your new employer if they can give you a different job until the restriction you agreed to runs out. This could be either a different kind of job or a different location - that way you won’t be breaking the restriction.

For example, if you work in sales you could ask your new employer to give you an admin job for 3 months. If you do agree a temporary change, check if your pay and conditions will stay the same.

Or if your old employer worked in a particular town ask if your new employer will let you work somewhere else until your restriction runs out. That way your old employer won’t worry you’ll take their customers.

If your new employer doesn’t have any other work you could do, and you really want the job, ask if you can delay starting until your restriction runs out.

If you don’t follow a restriction

If your employer wants you to follow the restriction but you ignore it, they can only stop you taking a new job by taking you to court. This might sound worrying, but it’s time-consuming and can be expensive, so they might not do it - especially if the restriction is too wide.

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