contract-law corporate-law
Big corporation in the UK, Conflicts of Interest and a Contract
<p>I've recently been offered a job for a large technology corporation in the UK. I've asked another question <a href="https://law.stackexchange.com/questions/1148/big-corporation-in-the-uk-intellectual-property-and-a-contract">here</a> about IP but also have a question on Conflicts of Interest I'd thought I'd ask separately.</p>
<p>I'm technically a director of a company which is not currently trading (and I've not taken any pay from). I'm worried that this might be problematic with my soon to be employer. In the contract it states:</p>
<blockquote>
<p><strong>Conflict of interests</strong><br />
You mustn’t be involved either directly or indirectly with any other trade or business competing in or conflicting with the interests of our Company. If you want to be involved with another business whilst working for us then you’ll need to get a letter from the Director of your area confirming that they’re happy for you to do this.</p>
<p>We understand that many people make investments for the future and you’ll not be prohibited from being a holder or owner of any stocks and shares as long as they’re listed on the stock exchange and you don’t hold more than 4% of the total share or loan capital of another Company.<br />
...</p>
</blockquote>
<p>I set up the company I'm a director of as a side project and I am fine with resigning from it.</p>
<h3>Is me being a director of my side-project company a problem here?</h3>
<p>My side-project company and the one I've got a job offer from, are only related in such that they are both technology based but otherwise are unrelated.</p>

<h2>Critique</h2>

<blockquote>
  <p>I'm technically a director of a company ...</p>
</blockquote>

<p>You either are or you aren't - there is no "technically" involved.</p>

<blockquote>
  <p>... is not currently trading ...</p>
</blockquote>

<p>And doing nothing can create a conflict of interest? How?</p>

<blockquote>
  <p>You mustn’t be involved either directly or indirectly with any other trade or business competing in or conflicting with the interests of our Company.</p>
</blockquote>

<p>"competing or conflicting" is the key here - if the "other trade or business" can adversely affect the performance of your employer then you have a conflict, if not, you don't.</p>

<blockquote>
  <p>are only related in such that they are both technology based but otherwise are unrelated.</p>
</blockquote>

<p>Sorry, but that is so vague as to be totally useless - what company today is not "technology based"? Pharmaceutical companies are technology based, so are construction companies, so are law firms but one would hardly call them "related".</p>

<h2>Solution</h2>

<p>Conflicts of interest are easy:</p>

<p>If you don't think you have a conflict of interest and they don't think you have a conflict of interest then you don't have a conflict of interest. If either or both of you do; then you do.</p>

<p><strong>Tell them about it!</strong></p>

<p>Conflicts of interest are a problem because people think that if you are keeping secrets then you are doing it for a nefarious purpose! </p>

<p>In 90% of cases declaring the potential conflict resolves the conflict because the other party says "That! Don't be silly; that's not a problem!" or words to that effect. In the 99.9% of the remaining 10% of cases then sensible people can come up with sensible solutions, for example:</p>

<blockquote>
  <p>If you want to be involved with another business whilst working for us then you’ll need to get a letter from the Director of your area confirming that they’re happy for you to do this.</p>
</blockquote>

<p>If your side project company is not competing with your employer then it should be fine.  In any event, you can always apply for a "letter from the Director of your area confirming that they’re happy for you to" continue to be involved with that company.  If they are truly unrelated, your director should have no trouble giving you such a letter.</p>
