Restrictive covenants are increasingly common in contracts for senior executives and professionals, but they are often overlooked until a dispute arises.
Our Employment Solicitors explain what restrictive covenants are, how they work, and when to seek legal advice can make a significant difference in protecting your career and reputation.
What are restrictive covenants?
A restrictive covenant is a clause in an employment contract that limits what an employee can do after their employment ends.
These clauses are designed to protect the former employer’s business by preventing unfair competition, misuse of sensitive information, or the poaching of staff or clients.
While they serve a legitimate purpose, restrictive covenants must strike a fair balance.
If they go too far – for instance, by being overly broad, lasting too long, or placing unreasonable restrictions – they can become unenforceable.
Who can enforce a restrictive covenant?
It is the former employer who is responsible for enforcing restrictive covenants.
If they believe a former employee has breached the terms, they can bring a legal claim in the civil courts. This might include seeking damages or an injunction to stop the individual from continuing the alleged breach.
Because these are legal matters with serious implications, anyone facing enforcement action – or worried about breaching a covenant – should seek legal advice immediately.
What types of restrictive covenants exist?
There are several types of restrictive covenants, each serving a specific purpose:
- Non-compete clauses: Prevent an employee from working for a competitor or setting up a competing business for a set period or within a specific area.
- Non-solicitation clauses: Stop a former employee from approaching or enticing away the clients, customers or suppliers of their previous employer.
- Non-dealing clauses: Go a step further by preventing the former employee from engaging or dealing with former clients, customers or suppliers, even if the client approaches the former employee.
- Non-poaching clauses: Also known as non-solicitation of colleagues, these restrict a former employee from encouraging ex-colleagues to leave and join them elsewhere.
How long do these clauses last?
Restrictive covenants are only enforceable for a reasonable period, typically ranging from 3 to 12 months, depending on the role, the industry, and the nature of the business being protected. The duration must be proportionate and tailored to the circumstances.
Are they always enforceable?
Not necessarily. To be enforceable, the covenant must protect a legitimate business interest, such as trade secrets, client relationships, or workforce stability, and go no further than reasonably necessary.
Courts will not uphold restrictive covenants that are poorly drafted, overly broad, or unnecessary. This is why getting advice before agreeing to such terms, or when seeking to leave an employer, is so important.
Contact Our Employment Lawyers
At Myerson, we regularly advise executives and professionals on their contractual rights and obligations, including restrictive covenants.
Whether you’re joining a new company, planning your next move, or facing allegations from a former employer, our Employment Lawyers are here to help you understand your position and protect your interests.
0161 941 4000
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Vicki Fagan
Senior Associate
Vicki has experience acting as an Employment solicitor. Vicki has specialist expertise in HR issues, claims for discrimination, unfair and constructive dismissal and whistleblowing, and the preparation of employment contracts.
About Vicki Fagan