Post-termination restrictions (also known as restrictive covenants) in employment contracts are often included to protect the employer’s business by restricting the activities of a former employee. They are relatively common in most employment contracts.
Sometimes employers can attempt to impose unreasonable and/or unfair restrictions on employees. Any contractual term restricting an employee’s activities after termination is void for being in restraint of trade and contrary to public policy, unless the employer can show that:
- It has a legitimate proprietary interest that it is appropriate to protect
- The protection sought is no more than is reasonable having regard to the interests of the parties and the public interest
Our employment solicitors can provide guidance upon the reasonableness and enforceability of a restrictive covenant.
As an employee, you can seek advice before signing any employment contract so you are aware of what you are signing, or you can use our advice in order to negotiate the contract before finalising it.
It should be noted that post-termination covenants are a common feature of many contracts but it depends on the specific wording that is proposed. If you start work but do not wish to agree to the covenants, it is important that you tell your employer straightaway, preferably in writing. Otherwise, you will be regarded as having accepted them.
If your employer tries to impose restrictions upon you during your employment, you should question whether you are happy to agree to such restrictions and seek specialist legal advice.
Alternatively, if you are intending to leave your employer’s business, or have already left and you want to know where you stand, you can seek our advice and we can explain the implications of those restrictions as well as the potential consequences of breaching such a restriction, e.g. injunctions and/or breach of contract claims.