Your employer sends you a new contract to sign – maybe you’ve been promoted, maybe a new management team are shaking things up. There are some new benefits – a a pension, health insurance – but there are some post termination restrictions in there , and you don’t like the look of them. You take a glance and tuck it away at the back of a drawer to deal with later, or decide not to sign it, so hang on to it.  Fast forward a few years– now you’re leaving, or have left to work for a competitor  Can your old company enforce those post termination restrictions, even though the you never actually signed and returned them? According to the High Court, it’s possible.

In FW Farnsworth Ltd and another v Lacy and others [2012] EWHC 2830 an employee given a new contract after he had been promoted didn’t sign or return it, but did apply for health insurance for himself and his family – which was one of the new benefits set out in the new contract. Later, when he went to work for a competitor, the High Court held that this was evidence enough that he had accepted all the terms , and so the restrictive covenants were part and parcel of his contract.

Had the employee not applied for any of the new benefits, the outcome might have been different; merely continuing to work does not mean that an employee can be taken to have accepted new terms which do not immediately impinge on the employee – see Solectron Scotland Ltd v Roper & ors EAT 2004 IRLR .

So what should you do in this situation? You have a number of options:

  • Get some advice – the clause might not be enforceable anyway. An employment specialist can tell you whether you have anything to worry about, and help you to negotiate something more acceptable.
  • Send the contact back with a note or email saying you agree it all – apart from the restrictive covenants. How will your employer react to that? If you’re lucky no-one will actually look too carefully. Make sure you keep a copy!
  • Leave it in a dark corner somewhere, give up on claiming any of those nice shiny perks, and hope for the best.