Protect your earning potential. Avoid zero contact clauses


We are seeing increasing moves from employers to control the activities of ex-employees. This can mean zero contact with the market sector in general, especially with competitors, network connections or even ex colleagues. It could include punitive and restrictive non competition clauses lasting as long as two years, or asking for LinkedIn connections to be deleted from the employee’s LinkedIn account. I have just heard from one employee who has been prohibited from contacting his ex-colleagues in any way following his departure

There is a reason why many companies call employees “human capital”. This is “the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value.”   (Wikipedia)

Whether the employee exit is acrimonious or harmonious, creating a firewall to ring-fence the company, to protect their business interests with a zero contact clause or clauses, seems to be on the rise. It is especially true for any individuals who work in client facing situations, are engaged in product development or strategic innovation roles.

Non-competition clauses

Helmut, now ex-President of a high-tech company, was “let go” six years ago. He had a “gardening leave” clause of two years with 80% of a very acceptable salary in his contract, which he had signed willingly. What could be bad about that he thought at the time? An extended holiday on an enviable salary. During this period he was completely prohibited from working in his sector. With the prospect of spending time with his family, improving his golf handicap and pursuing some new business interests, he looked forward to this time-out with some relish. He kept in touch with his network throughout the period and handled the transition by the book. However when he tried to re-enter his old field some two years down the line,  now ravaged by recession, he met one rejection after another. Helmut has never been able to return.

Jane, somewhat lower down the pyramid, also had a non-compete clause when she was made redundant. At entry-level with two years experience in Digital Media business development, she is now looking for another sector to transfer her skills. “It’s not easy with experience in only one sector to transfer into another. Inadequate product or market knowledge is something I hear all the time. At entry-level I can’t do that much damage to my old company.”

Who owns your LinkedIn connections?

Perhaps not you. Nathan an Account Executive  was made redundant recently. His employer wanted him to delete all the contacts he had made during the course of his employment from his LinkedIn account. It would seem that who owns your LinkedIn connections is a potential business minefield, especially if the employer pays for a Premium account which an employee has access to.

A good move to counteract this is simply to export all LinkedIn contacts so that they can be re-instated at a later date.

Read this for information on: How to export LinkedIn connections

Zero Contact with colleagues

A final area of potential conflict of interest came when Marilyn, an Events Manager was prevented from contacting her ex-colleagues, when she resigned from her position.  Over the course of her employment, several had become good friends.

Christopher Head, Director at Irenicon U.K. employment law specialists commented  “The situation with requirements not to contact ex-colleagues is even more ‘off the graph.’  Employers must have a protectable interest to start applying these clauses – and what are they trying to protect?  If they think confidential information is going astray, they should tackle that head on … but by an embargo on existing staff gossiping with former colleagues about in-work issues – not by trying to stop ex-staff from keeping up friendships they forged when they were working for the employer!  Employers tackle this from completely the wrong end … so often failing to set up basic and sensible security protocols about their data, and then putting in hysterical clauses into contracts to try to backfill their failure to do basic housekeeping.

Christopher continued  “If the employer wants to stop ‘poaching’ of key staff, those clauses can properly go into contracts – but there is a fair body of case-law about how far those clauses can go … only “reasonable” ones will be enforced.”

Annabel Kaye CEO of Irenicon,  added a final thought about the “potential unenforceability of ‘no contact’ clauses”  because of the Human Rights Act “freedom of association”   not forgetting “the right to a private life” protections.

So the moral of the post is to get advice before signing any contract that has the potential to reduce your opportunity to earning a living.

But not just by the employer.  They need to be protected by the employee as well.


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