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's legitimate business interests:-
- An ex-employer is generally not able to restrain you from working 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:
- Non-competion covenants
- Non-solicitation and non-dealing of customers covenants
- 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 Employment Law team might be able to act on your behalf.
