Restrictive Covenants

Employers can seek to impose restraints of trade on ex-employees, but these are often unenforceable.

  • We can negotiate these Restrictive Covenants as part of an exit deal
  • Advise on whether you are bound by them - whether you just want peace of mind or your ex-employer is threatening enforcement proceedings

Restrictive Covenants are unenforceable if they go wider than is necessary to protect the employer legitimate business interests:-

  • An ex-employer is generally not able to restrain you from orking in a competing business or soliciting ex-customers
  • Trade secrets and trade connections are legitimate business interests that an ex-employer can protect

There are 3 common types of Restrictive Covenants:

  1. Non-competion covenants
  2. Non-solicitation and non-dealing of customers covenants
  3. Non-solicitation of employees covenants

Courts are reluctant to uphold non-competition restrictions:-

  • The ex-employer must show that the you had acquired influence over his customers and
  • This is the only way of protecting confidential information
  • Even then, if you are barred from competing within a specified geographical area, it must not be wider than the area within which you did business

If you are restrained from soliciting or dealing with customers or clients:-

  • The covenant will have to apply only to those who you dealt with directly and should only apply for a reasonable period of time

If you are restricted from poaching members of staff once you have left:-

  • The covenant must specify which category of employee you can't approach or it is likely to be unenforceable

Employers can only restrict employees for a reasonable length of time - between 3 and 6 months is the norm and longer periods can only be justified in exceptional circumstances.

Please contact us to discuss how our specialist employment law solicitors can help you.

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