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My problem is the following:

I have signed a contract with a company in the UK with an effective start date which has to be defined. Now my previous company has claimed they can enforce a non-compete clause because the new company works in the same area as them. They told me after I signed the contract with the new company and they changed their mind after they initially said that they would not enforce that clause. Is it possible that the new company may decide to withdraw the offer that I have signed because of this clause? They told me this should not be an issue for them but they are taking a very long time to confirm my starting date and I am a bit worried they may change their mind.

Many thanks to anybody who can give me some insight on this.

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  • Was their initial comment verbal or in writing (or email), and who exactly said that (e.g. your direct supervisor, the CEO, someone from HR?)
    – sharur
    Jul 26, 2017 at 16:52
  • Non-compete clauses are very difficult to enforce, because of the right to earn a living. A generic software engineer working at a premiership football club might have an enforceable clause stopping him from working at other premiership football clubs, but not stopping him from working for a rugby club, or bank, or engineering firm. A financial software specialist working at a bank couldn't have an enforceable non-compete clause stopping him from working at another bank, because that would leave him nowhere to work.
    – AndyT
    Aug 3, 2017 at 11:42

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New company first. You and they have a binding contract and neither of you have legitimate grounds to terminate it. If your new employer repudiates the contract you can sue them for damages at contract law and unfair dismissal under employment law if that is a thing where you are. Similarly, if ultimately the restraint clause with your former employer is found to be enforceable, they can sue you for repudiation.

Old company. They have two difficulties is enforcing the restraint of trade clause:

  1. To be enforceable these clauses must be as narrow as possible to protect legitimate business interests. That means they must be limited in market, geography and role so that you can still earn a living: they are more likely to be enforceable on executives than line workers.

  2. They said they wouldn't enforce the clause in relation to the job offer (and you can, of course, prove this): this raises issues of promissory estoppel. People are not allowed to make representations that they will or will not do something knowing someone could act on their promise to their detriment if they break it.

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