Hi Joshuwaah.
I have restrictive covenants in my employment contracts with staff. They are reasonable, clearly explained to staff and absolutely enforceable in law. I hold insurance to protect my business interests which includes a free legal advice line covering anything that I can’t claim for. I’m in a much stronger position than my staff - only one of whom (the daughter of a millionaire) tested my contracts by seeking legal advice. And she had to back down.
I suggest you talk to a solicitor, they offer fixed fee interviews and can cover a lot of ground in an hour. Take your contract (I’m assuming you’re concerned about your relationship with your current employer), and have a clear idea about what sort of business you will be setting up.
An employer is entitled to protect its relationships with its customers, clients, suppliers and its confidential information. Restrictive contracts are usually time limited and apply to a geographical area so you could consider either setting up further afield or leaving to do something else for a period before opening your business.
What you can’t do is exploit your knowledge of your employer’s business. You can’t use confidential client information, or “trade secrets” - tips and tricks your employer learned by experience and taught you in-house that aren’t included in industry training. In general you can’t solicit custom from your (employer’s) client base, work for a competitor nor poach staff. If you aren’t careful you can find yourself sued for rather eye watering sums.
I haven’t sued a former employee for lost business but I have a friend who approached customers before leaving and he was threatened with a £5,000 bill.. He negotiated by delaying setting up on his own for 6 months and paying a slightly smaller amount. It was a very painful experience for him and it was a shame because he was offering a distinctly different service - however he approached his employer’s customers and that isn’t fair or reasonable behaviour.
After you’ve taken legal advice, talk to your employer. I made a team member redundant last year and she talked to me about her plans. She intended setting up on my doorstep, offering services that competed with my own. I was a bit startled and offended because I didn’t understand why she couldn’t bring the same entrepreneurial flair into her employment with me - it would have saved her job. However, by having a series of chats with me I ended up not objecting and wishing her well. I have lost a few clients, but not many and she has contracted for me which has been helpful. Ultimately we are on friendly terms and i respect her for the mature way she handled her exit.
