Unsigned employment contract

[kajai]

I recently carried out some consultancy work for a company I previously worked for. The contract sated that I could not work with or for a competitor for a specified period of time, for this reason I did not sign the contract and made it clear to the employer that I was not signing due to this clause. I now have the opportunity to work with a competitor. Am I bound to the terms and conditions of the contract even though I didn't sign it?

[Stu Dent]

This will come down to proof.

Acceptance of a contractual term can be implied. You made it clear that you did not accept a clause in the contract and your employer then allowed you to work with them. That implies that they accepted you rejecting the clause.

The other side of the coin though, is that in the absence of any written proof that you rejected the clause, then by going ahead and starting work with your previous employer, they can argue that that implies acceptance whether you signed the contract or not.

Can you prove you rejected the clause you objected to?

[Stu Dent]

The clause itself however may be voidable - I'll get back to you on that later unless someone else can advise on it's validity.

[Law Student]

You can't reject an individual clause, only the whole offer of a contract. As you carried out the work you have accepted a contract with the employer and, in the absence of any other offer, presumably on the original terms. I would therefore be surprised if you can avoid the non-competition clause.

LS

[Stu Dent]

There are two ways we can look at this issue then, L.S.

Using your argument along the lines of offer-acceptance, it is the employer who has accepted the offer NOT the employee.

Kajai made the employer a counter-offer. A counter offer is a rejection with a new offer. The rejection was the contract that included a 'restrictive covenant' clause, the offer was for the prospective employee to offer his services to his prospective employer under the original terms and conditions EXCEPT the restrictive covenant. The employer clearly accepted this!! The problem for Kajai (as stated earlier) is perhaps a lack of proving this acceptance of his counter-offer.

But even then, the restrictive covenant clause is voidable. I've read up on it tonight and it seems to be that it's validity very much depends upon the nature of the indvidual employer/employee relationship and how close the employee gets to any trade secrets or other confidential information of the company. A restrictive covenant will not be upheld simply to prevent a competitor hiring the services of a rival companies employees. However the fact that Kajai was a 'consultant' does not auger well.