VIC Post contract restraint period, clients soliciting product from me

Australia's #1 for Law
Join 150,000 Australians every month. Ask a question, respond to a question and better understand the law today!
FREE - Join Now

Melbel

Member
30 July 2016
1
0
1
I am currently held to a 9 month post contract obligation which reads as such:

Accordingly, you agree that you will not directly or indirectly, on your own account or for or on the behalf of any person or entity, within the Restraint Period:

a) canvass, solicit or endeavour to entice away from the Company, any person who or which at any time during the term of the employment was or is a client customer of the Company of whom you dealt with or did work for; or

I have had previous employers' clients reach out to me wanting to use my new employers' product (same product, different brand), in my industry clients use numerous suppliers to provide them with enough stock to sell so it is not uncommon for many of the clients from my previous employer to already be working with my present employer.

In a particular incident, I had a previous client reach out to me wanting a personal purchase, I supplied them with options to which they requested a formal agreement from me by forwarding on my original email using my old company email address, hence my previous employer has 'evidence' of me marketing to the client.

This client has advised my previous employer that it was for personal use and that they initiated the contact to request the options. To date, nothing has been sold, nor an agreement in place and I have advised the client that I am unable to assist them until my restraint period ends.

My previous employer are currently withholding commissions owed to me. When I requested the commissions I received this letter (below), which is the second letter regarding the same client and incident, to which I initially responded advising about the personal purchase and that no sales/agreement etc were made.

We further note your comments regarding your contact with our client in that they ...contacted [you] directly to discuss a private purchase

Our client has evidence which contradicts your comments and notes that you are marketing your current employer's products to our client.

Hence, you are to immediately cease and desist from soliciting our client's clients, failing which, our client resrtves all of its rights including but not limited to, instituting proceedings against you to enforce your post-employment obligations, subpoenaing you and your employer and seeking loss and damage as a result of your conduct.


My questions are;
  • Can they go after damages if they have not lost any sales?
  • Can they withhold my commissions payable?
  • If a previous client contacts me and asks for business do I have to turn them away for the full 9 months?
  • If there are existing clients that work with both organisations am I allowed to service the existing clients, even though I may have worked with them at my previous employer? (some of these clients have just been assigned to me as a colleague has just resigned)
Thanking you in advance for any advice/help you can provide to me.
 

Lance

Well-Known Member
31 October 2015
852
123
2,394
Hi Melbel,
My understanding is that restraint clauses are difficult to enforce. They ex-employer would need to establish that they have suffered a loss or damage's in some way from you breaking the restraint clause. I guess you need to weigh up if its worth the risk, but as I said these are hard to enforce unless there is a direct correlation between the breach of restraint clause and damaged suffered.
 
  • Like
Reactions: Melbel

Matthew Karakoulakis

Well-Known Member
27 October 2016
69
13
224
Hi Melbel,

It sounds like you have numerous questions that you are seeking answers to, and I would recommend getting specific legal advice before you take any actions that could potentially breach the restraint clause.

Regarding actions that you have already taken and your potential liability, this is something that is assessed on a case by case basis, and more information is needed before specific advice can be given.

Feel free to contact AMK Law on [email protected] to arrange a time to discuss your situation.

AMK Law will assist you in understanding the legal obligations attached to your restraint clause and can provide advice on your existing liability, as well as the best method to proceed forward with operating your business.
 
  • Like
Reactions: Melbel