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Restrictive Covenants in Employment Contracts

Restrictive covenants are used to protect companies by putting restrictions on what former employees can and cannot do when they leave.

Post termination restrictions or restrictive covenants are common in Senior Executive and other high level employee contracts.

If you need help with any matter related to a restrictive covenant or a post termination restriction, our specialists at Clarkson Wright & Jakes can support you

You may be embarking on a new role and need advice on a restrictive covenant that forms part of the terms of your employment, or perhaps  facing a restrictive covenant dispute with a current or previous employer.  We have the skills and experience to guide you, so you can protect your employment rights and career.

Looking for more information about restrictive covenants? Please take a look at our restrictive covenants FAQs.

To discuss how our experts can help you, please contact us on 01689 887887 or fill in our enquiry form.

Our experts can help with…

  • Reviewing a new employment contract which includes restrictive covenants
  • Advising in relation to any restrictive covenants or post termination restrictions
  • Challenging a restrictive covenant
  • Assistance if you are facing legal action for breaching the terms of a restrictive covenant

Our employment law expertise

Our Employment team advise Senior Executives and other high-level employees on a wide range of matters, including restrictive covenants. We are based in Orpington and work with clients in London, Kent and across the South East.

We can also assist employers with drafting  restrictive covenants in employment contracts to protect their business interests.

We are ranked for Employment Law by leading legal directories Chambers & Partners and the Legal 500. Additionally, members of our Employment law team have had their expertise independently recognised in the following ways:

Our employment law solicitors’ fees

Our pricing reflects the high-level expertise and value we deliver for clients. We can provide a clear cost estimate at the outset, with no hidden fees or charges.

Where requested, we may be able to act on a fixed fee basis for initial advice. We can also represent you at an hourly rate.

Restrictive covenants FAQs

What does restrictive covenant mean?

In simple terms, a restrictive covenant is a type of employment contract clause which stops an employee from taking certain action, when they leave an organisation.

For instance, a common restrictive covenant is a non-compete clause. The clause is used to stop an individual from being employed by a competing company for a fixed  time frame.

What are the different types of restrictive covenants?

There are different types of restrictive covenants that might be included as part of an employment contract, including:

Non-Solicitation or  Non-Poaching: These clauses seek to prevent an employee poaching their ex-employer’s clients or employees or encouraging them to work with their  new employer or own business.

Confidential Information: These are covenants used to stop a past employee from disclosing or mishandling the employer’s confidential information.

Non-Dealing: These clauses seek to prevent a previous member of staff from working with their former employers’ clients and customers, in their new role.

Non-Compete: Non-compete clauses stop the employee from starting a new role with a business that competes with their previous employer or a part of the company that they were recently working for.

Are restrictive covenants legally enforceable?

Restrictive covenants and post termination restrictions are often challenged by employees as being unenforceable.  This is usually the case if the employee believes that the clause is too restrictive and goes further than is necessary to protect the employer’s legitimate business interests.  If this is found to be the case the clause will be void in restraint of trade.

It is therefore essential that these types of clauses are carefully drafted and tailored to the specific employee’s circumstances.  If a restrictive covenant has been badly drafted and the meaning is unclear, a court is unlikely to enforce it.

Where a business wishes to enforce a restrictive covenant, it  will need to demonstrate that the clause goes no further than is reasonably necessary to protect the employer’s  legitimate business interests.

Can my company stop me from working for a competitor?

Under some circumstances your company may be able to stop you from working for a competitor by including a non-compete clause, but in the event of challenge, these clauses will be carefully scrutinised to make sure that they are reasonable

Where there is no restrictive covenant in the employment contract, or if the clause in deemed unenforceable, your company will not usually be able to stop you from working for a competitor, once you have left their employment.

What makes a restrictive covenant unenforceable?

For a restrictive covenant to be enforceable, it should include as much detail as possible. This includes the period of time during which the restriction applies, the actions being restricted, any geographical area that applies and any other requirements.

If a restrictive covenant is vaguely or too broadly drafted or does not include enough detail, then it may be unenforceable.

A restrictive covenant will be unenforceable if it is considered unreasonably restrictive, beyond what is considered necessary to protect the employer’s legitimate business interests.

What happens if you breach a restrictive covenant?

Where an employee breaches a restrictive covenant, the business is likely to enforce the restrictive covenant using one of the following means:

  • Obtaining an interim injunction, preventing the former employee from continuing the restricted actions
  • Suing the new employer, for their involvement in the contract breach
  • Seeking compensation and damages to account for the breach

If you have breached a restrictive covenant our specialists at Clarkson Wright & Jakes can provide legal assistance to support you. To discuss the specifics of your case today, please get in touch.

Who enforces restrictive covenants?

 Applications for injunctions or interim injunctions are usually made in the High Court to enforce restrictive covenants; however, such clauses will not be enforced in every case. Before enforcing a restrictive covenant, the Court will decide whether or not the restrictions are appropriate and reasonable. Any conditions should not be more restrictive than is necessary to protect the business interests of the company.

The business interests that a company might wish to protect include client relationships, trade secrets or workforce stability.

How do you challenge a restrictive covenant?

If your employment contract contains restrictive covenants or post termination restrictions, and you would like to challenge these, you will need to work with an expert solicitor.

To discuss restrictive covenants in employment contracts today, contact us at Clarkson Wright & Jakes, using the details provided below.

Speak to our employment lawyers in Orpington, Kent

If you require legal support regarding a restrictive covenant, please contact our Employment team on 01689 887887.