eric olthwaite wrote:
MW - am I right in thinking your thing is HR / employment? Can I ask you about a hypothetical scenario?
Someone’s been an employee of a company for over a decade. Originally started as a privately owned set up but there have been a number of takeovers / management buybacks / new takeovers over the years. Currently the company is a division of an overseas international megacorp. On each occasion AFAIK all staff have been TUPE’d across.
Now, said employee has a significant client base who are coming to the company for her in particular, not the company. As you might imagine, her contract has all manner of extremely stroppy clauses related to not contacting clients / ex-clients for a number of years after leaving. There may be a sniff of another sale / takeover on the breeze.
What I’m wondering is, at the point of takeover if it happens, this person would be able to say ‘I don’t want to be TUPE’d’ and could then at that point walk out and not be contractually constrained by the restrictions on client contact?
Sorry, Eric, only just seen this.
She can object to the transfer, which would effectively mean that the contract would not transfer to the new ownership (presuming of course the company is bought wholesale and not simply by means of a share purchase - in which scenario it won’t be deemed to have been a change of employer and, by extension, a TUPE). She will of course be unemployed as a result of this action.
That would then suggest that any restrictive covenant would be with the old company, rather than the new, as the latter never acquired her employment rights. If the old employer is ‘out the game’ it would certainly lessen any chance of them seeking to enforce the covenant.
My knowledge of restrictive covenants isn’t the greatest as they’re mostly enforced through civil courts and my job only really deals with employment tribunal matters, but it’s well known that said civil courts are very reticent to enforce RCs unless there’s clear danger to the company’s profitability.