VAR opts out of staff-poaching spat with Phoenix Software

Phoenix Software blasted by recruiter who claims the firm is restricting employees' rights to improve themselves and work prospects

Phoenix Software has come under fire after its use of controversial non-compete clauses forced a rival VAR to back out of a legal bid to poach a Phoenix staff member for fear of throwing money at a case it might not win.

Non-compete clauses are enforced by some companies, including Phoenix, to ensure that employees do not move to rival firms too soon after leaving in order to prevent them taking company secrets or customers with them – often forcing staff to go on "gardening leave" for a period of up to six months.

CRN understands one reseller attempted to sign up a Phoenix member of staff but was prevented from doing so because of the legal clause, which the firm controversially added to some staff's contracts last year, sparking a heated industry debate.

The anonymous rival then took legal advice on how to get around the clause, but decided to drop its plans to take Phoenix to court after being told by lawyers that the case could lead to a bill as large as £100,000 and only had a 50 per cent chance of being successful.

When the non-compete clause debate was first fired up last year, legal experts admitted there were grey areas surrounding the law in this area but urged tech staff to take the clauses seriously.

Paul Davis, managing director of recruiter Merlin Corp said the recent case proves that the clauses are preventing staff furthering their careers.

"It appears that certain employers believe that the knowledge you bring to them when you begin becomes their property and cannot be used after you decide to move on," he said.

"What [galls] me further is that Phoenix [prevents] its employees moving on to a potentially more forward-thinking and dynamic competitor [and even] stoops as low as to name competitors in the employment contract.

"One month's garden leave and the clause written in to your contact that you cannot better yourself at a company in the same field for a period of six months after leaving Phoenix is something that every new employee should look at and take advice on prior to joining."

But Phoenix defended its use of non-compete clauses and said it takes other resellers' interest in its staff as a compliment.

"It's standard practice in the industry for resellers to protect their pool of talented staff and we take it as a compliment that recruiters look to Phoenix Software as the place to find the best staff," said Phoenix director Sam Mudd.

"Rather than stifling our staff, perhaps it is a reflection on other resellers who feel the need to recruit externally, rather than nurturing and developing employees in a stable working environment as we do at Phoenix."