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Restrictive Covenants
If your contract of employment contains restrictive covenants, we can review the covenants and advise on their enforceability. This is particularly important for senior employees considering a move from their current role.
Enforceability of Restrictive Covenants
Restrictive Covenants are post termination obligations that employers seek to place on their employees after their employment ends. The aim of restrictive covenants is to protect the employer’s business interests, such as confidential information, client relationships, and workforce stability.
What are the main types of restrictive covenants?
- Non-Solicitation: a covenant to stop an employee from approaching the employer’s clients or customers after termination of their employment.
- Non-Dealing: a covenant to stop an employee from not only approaching the employer clients or customers after their employment has ended, but also to prevent the employee from dealing with the employers’ clients of customers. Non solicitation usually requires active steps by the employee to solicit business or custom, but a non-dealing covenant would apply even if the customer approached the employee.
- Non-Poaching: a covenant to stop employees poaching certain employees to join them at a competitor.
- Non-Competition: a covenant to prevent an employee from joining a rival employer after their employment has ended.
Why do restrictive covenants matter?
Employees could face a potential legal risk if they actively or inadvertently breach any of the restrictive covenants in their employment contract. Breaching a restrictive covenant could result in an injunction, damages and a hefty legal bill.
Are restrictive covenants enforceable?
Restrictive covenants are usually only enforceable if they:
- Are reasonable in duration, geographical reach, and scope of activity
- Are no wider than necessary to protect the employer’s legitimate business interests, such as confidential information, client connections, or workforce stability
- Do not contravene the public interest
- Do not go beyond what is necessary to protect the employer and thereby unfairly restrict the employee’s ability to earn a living
How Bermans can help
At Bermans, we provide comprehensive legal support to individuals who need advice on restrictive covenants: We can:
- Review and advise on the meaning, scope and enforceability of restrictive covenants. Whether that be covenants you have already entered or covenants that you are considering signing.
- Advise whether taking a new job could be breach of your covenant and advise on steps to take to limit your legal risk.
- We can assist with negotiating more favourable and less limiting restrictive covenants.
- Respond to legal threats or letters from your former employer seeking to enforce the covenants
Contact Us
If you need help to understand your rights, reduce legal risks, and avoid unfair restrictions on their ability to work. Whether you’re starting a job, leaving one, or facing legal pressure, professional legal advice can make a major difference.