What are Restrictive Covenants?
Restrictive Covenants are often inserted into contracts by employers to try to limit what employees can do after their employment has ended. Typically these will include provisions designed to prevent the employee from contacting or dealing with the company’s clients (non-solicitation and non-dealing), stealing their employees (non-poaching) or going to work for a competitor (non-compete).
Can Restrictive Covenants be challenged?
The courts will only uphold covenants if the employer can show that it has a legitimate propriety interest that it is appropriate to protect and the protection is no more that is reasonable having regard to the parties and the public interest. Often there are disputes as to how long it is reasonable for the covenant to last as well as their geographical scope. For example, in certain circumstances a non-compete covenant that seeks to prevent an employee from working for a competitor anywhere in the country for a period of 18 months may be less likely to be upheld than a provision of shorter duration limited to a smaller area.
If restrictive covenants are part of a wider despite between the parties often they can be negotiated as part of a Settlement Agreement, with an employer agreeing to a partial waiver or limitation.
Sometimes it is possible for employees to argue that they are no longer bound by the restrictive covenants if the employer terminates the contract in breach of its terms (e.g. if notice is not given) or if the employee is entitled to treat themselves as dismissed following the employer’s repudiatory breach of contract.
Why choose OWC?
Often employees will have signed up to restrictive covenants as part of their contract at the start of their employment but will not necessarily pay much attention to them until much later when their impact on securing another job becomes apparent. We have experience advising employees on disputes over restrictive covenants and can guide you through this complex area of law.
Contact our Employment Law Solicitors in London, Surrey and Middlesex