Restrictive Covenants
We provide expert guidance on drafting and interpreting restrictive covenants, which are clauses in contracts that limit an individual's actions after leaving employment. These clauses often restrict activities such as working for a competitor or soliciting clients or employees.
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What are restrictive covenants?
A restrictive covenant is a clause in an employment contract. If it is present in the contract of employment the employee is prevented from specific activities when they leave employment.
Standard covenants are as follows:-
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non-competition covenants – an employee could not work for a competitor in similar role and use their knowledge of customers which is confidential information;
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non-solicitation covenants – an employee would not be able to poach clients/customers/suppliers;
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non-dealing covenants – an employee would not be able to deal with former clients/customers/suppliers, even if they approached the employee;
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non-poaching covenants – an employee would not be able to take other colleagues with them
The restrictions are prohibitive for a certain period after leaving employment.
Although it is not quite as simple as an ex-employer placing restrictions on future employment, post-termination restrictions, are void where it is a restraint of trade, which goes against public policy.
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