Resignation
Lambert reportedly resigned from his role on 31 May 2012, an action that Norwich City allegedly refused to accept.
It is a common myth that resignations need to be accepted before they are binding. In reality, there is no truth in this. Provided that notice has been validly given, in accordance with the terms of the contract, it cannot be refused or indeed withdrawn without the consent of both the employee and the employer.
Refusals may serve a role in some situations. For example, where an error has been committed and a senior executive feels obliged to resign, the employer may make a symbolic 'refusal' in order to persuade the executive to stay. However, this 'refusal' only serves a purpose where both parties decide they wish the relationship to continue.
Restrictive Covenants
A key part of City's argument is that Lambert was not able to enter talks with Aston Villa without their permission. Meanwhile Lambert asserts that he had resigned from his post and was therefore a 'free agent'.
Whilst the specific circumstances for major football clubs may be different many employers, City's desire to prevent competition will ring true for many employers.
For a non-competition restriction to be valid, it is essential that the right balance is struck between protecting a legitimate business interest and the employee's need to find gainful employment in their specialist field. To this end, the restriction must offer no more than reasonable protection and cannot be there simply in order to prevent key employees from moving to a competitor.
Employers will often cite knowledge of confidential information as a reason for trying to enforce such restrictions. However, protection for ongoing confidentiality can be enforced regardless of where the senior executive is working and is a key point in assessing the reasonableness of any non-competition clause.
The duration of the restriction is also key. In the current climate it is unusual for restrictions in excess of 6 months to be considered reasonable for any but the most senior of employees and even then it can be questionable. However, notice periods are contractual and can only be reduced by agreement. If there is provision in the contract for enforced garden leave, it is possible to invoke this the moment an employee resigns. As many senior employees will have six month notice periods, even if the duration of their restrictions is reduced by the period of any garden leave, this is a straightforward way for employers to prevent any damaging competition for this period.
Alternative Dispute Resolution
The Lambert dispute is to be determined by the Premier League Managers' Arbitration Panel. This is just one of a number of ways to a dispute without going before a public tribunal.
For employment matters, ACAS is the most commonly used service. With each tribunal case assigned an ACAS conciliator, contact will be made with each party before any hearing to encourage a private settlement, of which confidentiality is usually a key element As the conciliator will be the point of contact, the parties themselves do not need to communicate with each other.
For more entrenched disputes, formal mediation can be a useful tool. For this, the parties will convene with a neutral third party who will work to bring about agreement. While the parties ultimately retain control of the process, the perspective of a qualified mediator can often be useful for both sides.
The key difference between arbitration and mediation is that any decision by the arbitrators is legally binding on the parties. It is not used as frequently in employment matters, as recourse to an employment tribunal is often cheaper. However, some industries, such as football managers, have established their own arbitration forum which they can revert to. Although some see arbitration as litigation by a different name, it is possible to make it a bespoke process and, importantly, the proceedings are no more public than the parties wish them to be.
Conclusion
It will be interesting to see how the dispute between Lambert and City plays out. However, despite the very public initial snipes, due to it going to arbitration, much of the detail may remain confidential between the parties.
James Hall Associate, Charles Russell
