Restrictive Covenants & Non-Compete Clauses

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What is a restrictive covenant and when will it be enforceable?

A business can protect its interests by restricting an employee’s activities for a period of time after their employment has ended.

A restrictive covenant will only be enforceable if it protects a legitimate business interest and is no wider than is necessary to protect that interest, otherwise it will be regarded as an unlawful restraint of trade. The only recognised business interests are:

  • trade connections (including the relationship between the business’s customers and its suppliers)
  • trade secrets and confidential information
  • stable workforce

Ensure restrictive covenants are drafted carefully

Restrictive covenants must be drafted carefully so that they:

  • accurately reflect each employee’s role
  • reflect the circumstances of the business
  • go no further than is necessary

The business should regularly review contracts that include restrictive covenants and check whether they need to be updated (for example, if the employee’s role has changed).

Types of clauses

The types of clauses found in restrictive covenants include:

  • Confidentiality
  • non-solicitation of:

- customers
- prospective customers
- other employees

  • non-dealing with

- customers
- prospective customers

  • non-compete including:

- geographically
- industry specific

Legal Briefings

We also have easy to follow guidance on this and a range of topics here.

Employment solicitors

If you would like further information, please contact Mel McCrum or Stacey Edgley. They are all members of the Employment Lawyers Association.