Restrictive Covenants

Spread the love

If you are subject to a Restrictive Covenant then Blacks Solicitors’ Employment Law team can help.

Restrictive Covenants are provisions in an Employment Contract which, following the termination of your employment, limit your freedom to trade or to take up employment with an employer of your choice. A Restrictive Covenant may be enforced if it is:

  • Reasonable (in terms of its extent)
  • In the interests of the parties
  • In the public interest

In order for any restriction to be enforceable:

  • There must be an interest which it is legitimate to protect. A restraint will never be upheld simply to prevent competition or to prevent an employee from using know‑how acquired by the employee
  • The restriction must be reasonable. It must offer no more than adequate protection to the employer and must be no wider than is absolutely necessary to offer protection

Somewhat bizarrely, reasonableness is tested at the time when the Restrictive Covenant was entered into, not when the restriction is enforced.

Factors which are often taken into account in judging reasonableness include:

  • The employee’s seniority
  • The type of business which is sought to be protected
  • The contractual notice period
  • The inter‑relationship between “temporal” and geographical restrictions
  • The availability of other appropriate forms of restriction

If you are thinking of leaving your employer to start working for a competitor, you may find yourself prevented from doing so if you have entered into restrictive covenants either at the outset of your employment or later.

Contrary to what many people believe, well-drafted restrictions will be enforceable. Acting in breach of valid restrictions may not only prevent you from taking up new employment, but could also see you the subject of costly and time-consuming legal proceedings.

Before taking any action you should always check what restrictions you may be subject to and seek legal advice on their enforceability.

 

For more information about how Blacks can help you, or for a free no obligation discussion, please email or call our Employment Law team today on 0113 207 0000.