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Old 07-09-2009, 11:09 AM   #4 (permalink)
Bully's Special Prize
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Personally no, but that doesn't mean that it hasn't happened.

I've done some searching as a Monday morning activity (I'm ignoring all my emails), firstly recruitment consultant magazine don't give much help here, the only thing they say is:

Quote:
Living in a more regulated and litiginous society has additional perils for any start-up. Recruitment businesses are more and more willing to enforce restrictive covenants in consultants’ contracts when moving to set up on their own – this could prevent you from speaking to your most favoured client for over six months. Add to this a need to plan and fund your business beyond the first 6-12 months, and the process looks more daunting.
So it doesn't give a figure.

A little bit more info on them in general is here. I think this part is interesting:

Quote:
A restrictive covenant is usually a clause in a contract which prohibits an employee from competing with his ex-employer after the employee has parted company with the business, or prevents the ex-employee from soliciting customers of the business by using knowledge of those customers gained during his prior employment.

However, if the ex-employer can convince a court that the covenant is:
  • designed to protect his legitimate business interests; and
  • that it extends no further than is reasonably necessary to protect those interests
then it will be upheld and enforced.
So any that simply say "you cannot set up a competing business for 12 months" would be unenforceable, you would only be able to stop them poaching your clients. I can't see how many companies would invest their resources into pursuing an extremely costly legal fight if an employee did run off with a couple of clients, especially if there wasn't a "locked in" contract that you would do ALL their hiring without exception (very rare). The client would simply state that they were exploring alternative recruitment options.

Finally, I think this link is a good source of interesting information on restrictive covenants in general:

Restrictive Covenant for Recruitment Consultants - Employment Law for Recruitment

Right, time to tackle those emails.
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