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EMPLOYMENT LAW

Restrictive Covenant Solicitors

Atkins Dellow > HR and Employment > Restrictive Covenant Solicitors

Restrictive Covenants are a part of Employment Law that Employees and Employers alike often find unclear and confusing.

Our experienced team of Employment Solicitors can help you with understanding, creating and enforcing Restrictive Covenants.

Restrictive covenants in a contract of employment are clauses to restrict an employee from taking certain actions for a time period after their employment has ended.

Usually the intention is to protect the business and help retain the business’s customer base.

Restrictive covenants must be carefully drafted for them to be enforceable. We are often asked to advise on whether a restrictive covenant in an existing employment contract is enforceable.

Advice and Legal Services for Restrictive Covenants

There are 4 main kinds of restrictive covenant in employment law:

  • Non-competition
  • Non-solicitation
  • Non-dealing
  • Non-poaching

In each case the restriction should be limited in duration, usually between 3 and 4 months, and a non-competition covenant should be limited in its geographical application in order to be enforceable.

Non-competition

A non-competition restrictive covenant prevents an employee from leaving an employer and joining a competitor, or setting up in competition to their former employer, within a set time frame.

Non-solicitation

A non-solicitation of clients restrictive covenant restricts an employee from seeking work from the business’s contacts, customers and clients for a period of time after their employment has ended. This type of restriction can also seek to prevent the employee from making contact with the business’s contacts, customers and clients.

Non-dealing

A non-dealing clause is designed to stop the employee from dealing with any of their former employer’s customers or clients. This type of restriction gets over the difficulty of the employer needing to show that the employee actively sought business from a customer or client, as it simply stops the employee from dealing with them.

Non-poaching

A non-poaching restrictive covenant seeks to restrict the employee from poaching other employees from their former employer after they have left. This is can be particularly relevant in industries where team moves are common, and in circumstances where recruitment of staff is challenging.

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Restrictive Covenants FAQs

Are Restrictive Covenants Enforceable?

It depends on the circumstances of each restriction. But, in general, post-termination restrictive covenants are only enforceable if they are deemed reasonable to protect a legitimate business interest.

These will be things like:

  • Trade secrets
  • Prospective or existing clients
  • Confidential information
  • Connections with suppliers
  • Employees of the business

What will the court look at to decide if a restrictive covenant is enforceable?

The court will look at all the circumstances of the case. These can include:

  • Whether the employer has legitimate business interests that have to be protected.
  • Whether the restrictive covenant is found to deny the employee the right to make a living in their chosen industry or field.
  • Whether the restriction is longer than is necessary to protect the interest of the employer.
  • Whether the restrictive covenant is wider than is necessary to protect the interest of the employer.
  • The position the employee held in the business while employed.

The amount of ‘confidential information’ the employee had access to while they were employed by the business.

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