Enforcement of Restrictive Covenants
Restrictive Covenants
When creating and negotiating contracts of employment, you should also consider what restrictions you might like to place on your employees in the event that they leave the business. Having restrictive covenants that have been agreed by your employee in writing would help you to protect your business and to enforce these restrictions if the employee attempts to breach them.
These restrictive covenants (also called post-termination restrictions) are a common feature of employment contracts and can help to protect your business through periods of staff turnover. They are intended to survive the end of the employment relationship and prevent those employees from compromising your business interests by, for example, setting up business in competition with you, going to work for a company which operates in competition with you, attempting to solicit your clients, customers, or staff, or divulging trade secrets or confidential information.
There are a great deal of variables to take into account when drafting restrictive covenants. These covenants should be specific, focused and go no further than is reasonable to protect your business interests. You should consider both a timeframe for these restrictions to apply, which might typically exclude any garden leave or notice period, and a geographical scope, for example, to apply within a ten-mile radius of your premises. You should also consider updating the restrictions if the employee starts a new position in the company to ensure that the covenants are applicable to the job they are doing. Ultimately, a breach of these covenants can expose an ex-employee to a claim for breach of contract or to injunction proceedings together with recovery of your losses.
Talk to Tollers
In certain circumstances, an effective restrictive covenant can be crucial to protecting your business. As employment law solicitors, we understand the fine balance that needs to be struck when imposing such covenants, so that they are not too broad (and therefore at risk of being ruled as unenforceable) but still protect your interests sufficiently. We can help you define the restrictions that address this balance most appropriately for your business.
