Information about a business’ operations, customers, products and services is valuable. When it leaks outside that organisation, or is used to a business’ detriment, the consequences can be serious. That's why we provide solicitors trained in drafting enforceable restrictive covenants.
Businesses entrust staff with sensitive commercial information every day. Few organisations could function otherwise. That’s the same whether it’s a list of key clients, the scientific formula that makes up a product, or a method of providing a service.
Confidential information is generally respected by employees. They understand its importance to the organisation and are careful not to divulge details. Problems are more likely to happen when an employee thinks about leaving. They might be planning to join a competitor, set up a similar business of their own or might even hold a grudge against their employer.
In some situations, an employee may be tempted – or persuaded – to breach their obligation of confidentiality but a restrictive covenant could well be the disincentive they need. These are clauses in employment contracts which restrict an employee’s ability to compete, use confidential information, or have certain dealings with a business’ clients or staff once they have left their job. Typical restrictive covenants can be clauses which:
- stop an employee poaching a customer/client or supplier
- stop an employee dealing with a customer/client or supplier, irrespective of who approached who
- prevent the employee from working for a competitor for a certain period
- stop an employee poaching former colleagues
The main pitfall with restrictive covenants is in their enforceability. They must not be drafted too widely, for example imposing a restriction which puts the employee out of work entirely, or which seeks to prevent them from working for a competitor indefinitely.
Restrictive Covenants Solicitors
Our commerce and technology lawyers take care to draft restrictive covenants which are appropriate, reasonable and stand the best possible chance of being considered enforceable by a court. They start at the beginning, analysing the extent of protection a business needs in the context of the seniority of the employee concerned. They look at the type of work the individual will be doing and where, and the information and customers/clients they will have access to. They work with the business to draw up restrictions which strike the right balance between adequately protecting the business’ interests and enabling the employee to move on.
With the right restrictive covenants in place, a business can be sure that it’s done all it can to prevent a former employee from breaching confidentiality. If the breach does happen, the business has a sound set of covenants to rely on in injunction proceedings or a damages claim.