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I have a question regarding restricted covenant agreements. I work for a company that recently phoenixed from an old company. The new contract which I have signed also has a separate document for a restrictive covenant agreement which I have not signed.

I have accepted employment with another company and given notice to my current employer who is now claiming that I must sign the agreement as HR require it for me to leave. No where in my contract does it say anything like this. Is this something they can enforce as they are clearly doing it to try and get me to sign so I can not move to the new company. Clearly I do not want to sign it and never had any intention of doing so. Any help appreciated.

divsmo 1
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    I can't speak for the legal situation so this isn't an answer, but: HR require you to sign something so you can leave? What are they going to do if you don't sign it, fire you!? This sounds (as you already suspect) like nonsense. – BittermanAndy Apr 19 '22 at 16:31
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    @BittermanAndy Sounds like the worst that would happen is the original poster cannot use the company they are leaving from as a reference. If that doesn’t matter, burn the bridge and walk away. If that does matter, push back on signing the document and then walk away. Subtle difference but it makes a difference in the long run. – Giacomo1968 Apr 20 '22 at 12:49
  • @BittermanAndy Umm, fire you and then sue you? I'm not saying they have a case, but lawsuits happen for all sorts of reasons. And defending against them can be painful. – Barmar Apr 20 '22 at 14:16
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    @Giacomo1968 Refusing to sign a document can sometimes be done politely and without "burning bridges". Especially if a reference would likely come from the OP's manager, whereas the document-signing issue is with HR. – Stef Apr 20 '22 at 14:29
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    @Stef That is basically what I mean in the second part of my comment. Push back on the signing of a document and then seek alternative ways to assure a reference. – Giacomo1968 Apr 20 '22 at 14:30
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    @Barmar again, IANAL, but I find it hard to believe anyone could sue someone for not entering into a legal agreement with them. "Give me your car, for free". No. "OK, I'll sue you for not agreeing to give me your car, for free". Oh no, I'd better give them my car for free so they don't sue me! Yeah... no. You sue someone for breaking an agreement, not for never entering an agreement in the first place. – BittermanAndy Apr 20 '22 at 15:32
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    A person unable to leave their current employment is the defining characteristic of a slave. What do the current UK laws look like on the subject of slavery? – Mason Wheeler Apr 20 '22 at 15:35
  • @BittermanAndy As I said, they may not have a valid case. But lawsuits are often threatened without any legal basis. – Barmar Apr 20 '22 at 15:40
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    Others have pointed this out, but I don't see what they could possibly mean by HR requiring this so that you can leave. – EJoshuaS - Stand with Ukraine Apr 20 '22 at 19:35
  • Does this answer your question? Should I sign a non-compete as I'm leaving a company? – EJoshuaS - Stand with Ukraine Apr 20 '22 at 19:39
  • Also related – EJoshuaS - Stand with Ukraine Apr 20 '22 at 19:39
  • @Barmar I'd be more concerned about rug pulling for anything that's not a legally mandated action. Ex my (US) employer has getting paid out for unused PTO days conditional on serving 2 weeks notice if I choose to quit. – Dan Is Fiddling By Firelight Apr 20 '22 at 21:23
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    "HR require it for me to leave" My understanding is that slavery is illegal in the UK. – Acccumulation Apr 20 '22 at 23:21
  • What country are you in. Some countries have interesting laws about employment that may look strange to US/UK residents. – Martin York Apr 21 '22 at 18:25
  • This has been hinted at around and about, but, if your company puts new contracts in front of you and you refuse to sign, you could lose your job. If it came to this, you wouldn't actually have been "fired" - so there's no real stain on your CV. (There will be a weird legal-ese term for what happened, someone might pitch in!) And even then if you decided to pursue the issue they may well find themselves in trouble for unreasonable terms in the new contract. All that means that this new contract has no bearing on your ability to leave, only your ability to stay. And you're leaving. – Grimm The Opiner Apr 22 '22 at 07:18

3 Answers3

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I must sign the agreement as HR require it for me to leave

This is wrong. You do not have to sign any additional documents in order to leave a job in the UK. All you are required to do is formally give notice (usually via a letter to your line manager or HR) then serve the notice period you agreed to in your contract.

The new contract which I have signed also has a separate document for a restrictive covenant agreement which I have not signed.

This is a bit unclear. If the covenant is referenced from a signed contract you may already have agreed to it. Ask an employment lawyer to review your most recent contract if you'd like to know for sure.

I have accepted employment with another company...they are clearly doing it to try and get me to sign so I can not move to the new company.

This may be too late but note that you are under no obligation to tell your current employer who you are moving to work to. When they ask where you're moving to, just reply that you've enjoyed working with them but would rather not discuss your next steps. (Or say that a confidentiality agreement prevents you from saying!) If your current employer doesn't know where you're moving to, it's hard for them to claim with any confidence that any non-compete (certainly including the one you haven't signed) is relevant.

simonc
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    No there is no mention whatsoever of a covenant agreement in the main contract as I fully read it and made sure of this before accepting it. As it is only a 3 page contract it is fairly basic in terms of the contents.

    The covenant agreement is a completely separate document which I have not signed as it was extremely restrictive of what I could do upon leaving. Due to the current management leaving has been on my mind for sometime it was just a case of waiting for the right job to come along. Thanks for your advise I had a feeling what they were doing was not in any way correct.

     – divsmo 1 Apr 19 '22 at 14:47
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    Remember not to update LinkedIn and other social media with the new company's details if you don't want them finding out. At least until it's too late for them to do anything. – user Apr 21 '22 at 12:43
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Sort of the same answer as simonc's good answer but I want to elaborate.

It's very possible that your employment with the phoenixed company is at risk if you don't sign that agreement. But this doesn't mean that you can't quit.

Your next steps:

  1. Send an email giving notice
  2. Send registered mail confirming you giving notice
  3. Wait their next steps

If they say you can't quit without signing some additional agreement simply state:

"I have given my notice, and my employment will cease on date X".

If they persist, get in touch with the Citizens Advice Bureau.

Your employer isn't obliged to give you correct legal advice. In addition, they do not have your best interests at heart. They want you to sign a document, and may be inclined to lie to get you to do so. They may threaten to withhold paychecks. They cannot do this legally.

Gregory Currie
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  • If they're leaving, why does it matter if their employment is "at risk"? – Barmar Apr 20 '22 at 14:13
  • @barmar with the new company, not the old one. – Mindwin Remember Monica Apr 20 '22 at 14:42
  • @Mindwin The answer says "employment with the phoenixed company". That's the old one. – Barmar Apr 20 '22 at 14:46
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    @Barmar There are three companies. The very old one, the new old one, and the new one. – Gregory Currie Apr 20 '22 at 15:05
  • The very old one seems irrelevant, he no longer works for it. The new old one is the phoenixed one (I'm not familiar with this term for companies, I assume it means a spin-off), and he's leaving it. The new one is not the phoenixed company. – Barmar Apr 20 '22 at 15:09
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    @Barmar A phoenix company is when you basically take an old (usually failing) company, sell/transfer all of its assets to a new company, and start again. The reason why it may matter that their employment may be at risk is there may be a significant notice period where the OP needs an income to pay the bills. Some people live rather week-by-week so I wanted to mention it. – Gregory Currie Apr 20 '22 at 15:14
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Theoretically, what would happen if you didn't sign it, and left anyway? Would the old company keep on paying you, because they hadn't let you leave?

A basic concept in contract law is quid-pro-quo (both should benefit). Where is the benefit to you if you sign this restrictive contract? I'm not seeing anything. (if you require more detail, you need to talk to an employment attorney)

Read your existing contract. It probably has a clause saying that "If you do not turn up for work for x days and do not contact your manager, you are assumed to have left the company"..

Slavery is illegal, so they cannot prevent you from going to work for someone else. Of course, if you have intent to (say) sell lots of information from the old company, or take contact lists with you, then there are probably other issues that need addressing.

PeteCon
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    Quid pro quo is far from universal, and much less widely applied than in for example the US. – BrtH Apr 19 '22 at 15:46
  • Note that in Belgium (so not applicable probably) those quind of clause should include monetary compensation (which is why they are never applied) – CharybdeBE Apr 20 '22 at 13:15
  • @BrtH true. However, places with contract law that allows for these kinds of imbalanced contracts usually assume people read and understand what they are signing. "The HOA bylaws may seem unfair, but you knew what you were buying into, didn't you?" – Mindwin Remember Monica Apr 20 '22 at 14:44
  • Sadly, with UK employment law, if the company proves the agreement is vital to business operations going forward, they can fire the employee if they don't sign it. Doesn't impact the OP here, but it obviously is important in other situations. – Gregory Currie Apr 20 '22 at 15:24
  • @Mindwin: That would be a rather dangerous assumption. Some countries also treat donations and the like as "one-sided contracts", e.g. a giving away a GPL license. Quid pro quo might not be required when the sole beneficiary did not write the contrattg – MSalters Apr 22 '22 at 07:31