Restrictive Covenants

Non-compete and restrictive covenant advice.

Employers often include post-termination restrictive covenants in contracts of employment.  Our employment team can provide you with a detailed analysis of the enforceability of any such restrictions which apply to you.

We can also provide tactical advice in responding to an employer’s attempts to enforce the restrictions in pre-litigation correspondence and will work with our dispute resolution team, in defending any claims against you.

Our team may also be able to act for your new employer as it is not unusual for proceedings to also be threatened / instigated against them, on the grounds that your new employer induced or facilitated you to breach your contract of employment.

What are restrictive covenants?

Restrictive covenants are intended to protect the employer’s business interests and are designed to prevent departing employees from soliciting or dealing with the employer’s clients, misusing its confidential information, ‘poaching’ skilled employees and, in certain circumstances, preventing them from working for a competitor.

Restrictive covenants in employment contracts are generally viewed more strictly than those in commercial contracts, such as those between a seller and a buyer because of the inequality of bargaining positions between employer and employee. This in turn can make it more difficult for employers to draft restrictions which the Courts are willing to enforce.

In general, the organisation seeking to rely on these restrictions would need to satisfy a court that:

1. The restrictions are intended to protect or safeguard one or more legitimate interests, namely:
   • Confidential information; or
   • “customer connection” – the rapport or relationship which the employee may have created with the client in the course of their employment; or
   • maintaining a stable workforce; and
2. The protection sought should be no wider than is reasonable having regard to the interests of the parties and the public interest. This my well involve the employer having to limit the restricted activities themselves, the period for which the restriction will apply, and (if appropriate) the geographical extent of the restriction.