Restrictive Covenant Solicitors
If you are thinking about changing jobs, you will need to check your employment contract for restrictive covenants which outline what you can’t do after you’ve left.
Due to impact of coronavirus, unfortunately people are losing their jobs, either through redundancy or settlement agreements, and will be seeking new employment. Many of these employees will have restrictive covenants within their employment contract or within the settlement agreement.
What is a restrictive covenant?
In employment law, a restrictive covenant is a clause in an employee’s contract which prohibits them from carrying out various actions in their future employment for a set period of time after they’ve left.
There are different types of restrictive covenants used by employers, including:
- Non-competitive – restricts an employee from working in a similar role for a competitor
- Non-solicitation – prevents the poaching of clients, customers, suppliers of the business
- Non-dealing – stops ex-employees from dealing with former clients, customers and suppliers
- Non-poaching – prevents ex-employees from poaching former colleagues
Why do employers include restrictive covenants in contracts?
Any business, big or small, has information that it considers instrumental to its success. By restricting the use of or access to this information after an employee leaves, an employer can protect its business’ success as well as key contracts, stakeholders and customers.
Without this, if an ex-employee has knowledge of their previous employer’s strategic information, client base or even technology, the business risks losing that to a competitor.
Restrictive covenants have to be drafted to protect a legitimate business interest. They must not extend any further than is reasonably necessary to safeguard those interests.
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How are restrictive covenants enforced?
Aside from being written into an employment contract, it’s the employer’s responsibility to show that the clause is justified. They must be able to specify any geographical area of a restriction and the length of time this applies to. The covenant should also outline the specific activities being restricted and the type of interest it aims to protect.
A one-size-fits all approach is risky. The information that a senior colleague has access to will differ to that of a more junior employee, for example. So employers must be specific and able to prove that their requests are justifiable.
How we can help
If you’d like advice on a restrictive covenant or your employer has threatened to take action against you for breaching a clause, we can help. Our employment solicitors work with employees and employers across Bristol and South Gloucestershire. Call us on 0117 325 2929 or fill out our online enquiry form.