Restrictive covenants

If your employment relationship ends, your employer may have legitimate concerns that you will attempt to take clients and other employees with them, especially if you are moving to a competitor. To mitigate this risk as far as possible, you may be made subject to a post termination restrictive covenant in your contract of employment or service agreement (if you are a director).

If you are an employee in this situation, it’s important to check that the terms of your restrictive covenant are fair and legal.

Restrictive covenants usually last for a defined period following termination of employment. Efforts to curtail employees’ activities following the termination of employment are generally void as a restraint of trade, unless the employer can meet certain requirements. Covenants must protect a legitimate business interest that requires such a measure and be no wider than reasonably necessary to protect those interests. Legitimate interests may include customer relationships, trade secrets, and confidential information. However, such matters need to be considered on a case-by-case basis, as what may be a legitimate business interest in one business may not be in another.

Our team has a great deal of experience in drafting restrictive covenants and enforcing and defending these in the High Courts, so should you have any queries in this regard please get in touch.