Advice regarding contract laws

[rowdy]

My wife owns a hair salon.
Her sister works at another hair salon in the same village, but wants to leave and work in my wifes salon. However, about three years ago (when my wife opened her salon) her boss made her sign a contract that said she is not allowed to leave and work in another hairdressers within three miles.
My sister inlaw did not recieve a copy of the contract that she signed, and she has also seen her hours of work continually reduce, so I am seeking advice as to where my sister inlaw stands regarding the legality of the contract.

[Ed]

If you can email me a copy of the contract and the restrictive covenants then I'll happily have a look at it for you.

ed@galegal.co.uk

[wyrdness]

Ed is our resident legal beagle, so I'm sure that he'll be able to give you a good answer.

Unlike Ed, I'm not a lawyer. But I did have a contract a few years ago that had a similar non-compete clause. My lawyer persuaded them to waive it when they made me redundant on the grounds that it would amount to restraint of trade.

I really can't imagine any court siding with the salon boss on this one. Non-compete clauses can be enforced, but only usually where trade secrets are involved. I suspect that in this case it would be deemed to an unreasonable restraint of trade. I don't know that it would even be worth while for the boss to try to take her to court, unless he's a real vindictive cnut.

Edit: Here's something from a real lawyer about a real case. The guy had been Managing Director of the company and "was party to all major strategic and operational decisions and that as such he had knowledge of and access to confidential information." Because of that, the non-compete clause was upheld. However:

When considering restrictions the general rule is that they are void as they are in illegal restraint of trade and therefore against public policy. However, the courts recognise that some legitimate interests can be protected by reasonable clauses. This means that if a covenant is found to be necessary to protect an employer's legitimate business interests and is no wider than necessary to protect that interest then it will be enforced.

From: http://www.steenandco.co.uk/12-month-non-compete-clause-upheld-by-court-of-appeal-_60/

[rowdy]

If you can email me a copy of the contract and the restrictive covenants then I'll happily have a look at it for you.

ed@galegal.co.uk
Thats half the trouble Ed, my sister inlaw doesn't have a copy of the contract. She has asked her boss on three occasions but hasn't recieved it, she has asked for a copy twice in the last couple of days by text message but hasn't even recieved a reply.
It isn't just her that hasn't recieved a copy, it is all of the employees.
Thanks for your response.

[rowdy]

Ed is our resident legal beagle, so I'm sure that he'll be able to give you a good answer.

Unlike Ed, I'm not a lawyer. But I did have a contract a few years ago that had a similar non-compete clause. My lawyer persuaded them to waive it when they made me redundant on the grounds that it would amount to restraint of trade.

I really can't imagine any court siding with the salon boss on this one. Non-compete clauses can be enforced, but only usually where trade secrets are involved. I suspect that in this case it would be deemed to an unreasonable restraint of trade. I don't know that it would even be worth while for the boss to try to take her to court, unless he's a real vindictive cnut.Yeah, I was kinda hoping Ed would come along and offer some advice, but didn't want to bother him with a pm.
I was wondering whether being in a recession would have any bearing on the contract clause, and the fact that hours and wages are being reduced.
It seems to be fairly common in hairdressing work to have these kind of clauses, as there is scope for soliciting clients and that sort of thing.

[wyrdness]

Maybe she needs a solicitor to write him a letter asking for a copy of the contract and suggesting that any attempt to enforce a non-compete clause would be an illegal restraint of trade.

[Ed]

Maybe she needs a solicitor to write him a letter asking for a copy of the contract and suggesting that any attempt to enforce a non-compete clause would be an illegal restraint of trade.

Exactly what I was thinking... although the second bit is a bit aggressive for a first letter! I'd normally write a polite letter. There's a lot of psychology ion this - eg Dear Mr Hairdresser rather than Dear Sir, a soft approach, and sign the letter with blue pen as blue is a friendly colour, black is not.

I can't advise in detail without seeing the contract. The general advice above is correct. Clauses such as this must be no wider than is absolutely necessary and for as short a term as necessary. Are you sure that she is actually employed? It's fairly unusual in haidressing. If she is then there is an obligation to provide a contract within 13 weeks. As for the non compete clause, the only thing that I can say from what you've posted is - it seems to be unsupported by consideration. In other words, what did she get for signing the document? If nothing, then it may well be void. Also - it costs £££ to start proceedings for an injunction. Cost is going to be around £1500 - £2000. Does the boss have that sort of money?

As for is it affected by recession? No. Affected by reduced hours and wages? Maybe - did Sis in law consent, or was it imposed?

If it's any easier, call me. Office number is 01743 235161.

Ed

[rowdy]

Exactly what I was thinking... although the second bit is a bit aggressive for a first letter! I'd normally write a polite letter. There's a lot of psychology ion this - eg Dear Mr Hairdresser rather than Dear Sir, a soft approach, and sign the letter with blue pen as blue is a friendly colour, black is not.

I can't advise in detail without seeing the contract. The general advice above is correct. Clauses such as this must be no wider than is absolutely necessary and for as short a term as necessary. Are you sure that she is actually employed? It's fairly unusual in haidressing. If she is then there is an obligation to provide a contract within 13 weeks. As for the non compete clause, the only thing that I can say from what you've posted is - it seems to be unsupported by consideration. In other words, what did she get for signing the document? If nothing, then it may well be void. Also - it costs £££ to start proceedings for an injunction. Cost is going to be around £1500 - £2000. Does the boss have that sort of money?

As for is it affected by recession? No. Affected by reduced hours and wages? Maybe - did Sis in law consent, or was it imposed?

If it's any easier, call me. Office number is 01743 235161.

Ed
Thanks for that Ed.
To answer some of your questions, reduced hours and wages were impossed, rather than consented to. Sis inlaw, did not recieve anything to do with the contract, but if it went to court then I'm sure my sis inlaw would be accused of recieving and then losing it.
The salon owner has access to funds and probably would persue court action, as the contracts were introduced as a direct result of my wife opening her own salon.

From reading the article that wyrdness kindly put the link up about, it states that 12 months is generally regarded as the maximum term acceptable for such covenants. Is it possible that if an unacceptably long period (lets say 2 years for example) is stated in the contract, that this may cause such covenant to be deemed void?.

[jambo]

As above, Ed is the man in this area.

However, I might get her to write a letter along the lines of
"Dear Mr Hairdresser.
I am formally requesting a copy of my contract, as I have never been furnished with one. As I'm sure you are aware it is a requirement that I am provided a copy within 13 weeks of signing it so I can make sure I'm aware of all conditions of my employment.

Thank you"

Or the slightly punchier "I quit, and as you've failed to provide my a copy of my contract despite repeated requests and a legal obligation to provide it, I consider it null and void"

Jambo

Of course, I'm plenty brave from a keyboard when it's not my job.

[Ed]

Rowdy, I'm not talking about did she receive a copy. I'm talking about did she receive payment.



From reading the article that wyrdness kindly put the link up about, it states that 12 months is generally regarded as the maximum term acceptable for such covenants. Is it possible that if an unacceptably long period (lets say 2 years for example) is stated in the contract, that this may cause such covenant to be deemed void?.

Yes. And the Court would not reduce it to something it considered acceptable - the clause will stand or fall on its wording. 2 years would be very long and would be difficult for the owner to defend. But it depends on the circumstances. In some cases, 3 months might be excessive. If the clauses weren't explained to your SIL and she wasn't told to go get independent legal advice before she signed up, there's another ground of attack. From what you say I suspect she wasn't even allowed to read and consider.

[rowdy]

Thanks again Ed.