Restrictive Covenants In Employment Contracts

Are restrictive covenants enforceable?

If employment contract containing restrictive covenants in your employment are enforceable. This means that if you violate a restrictive covenant, the court can order you to stop violating it and/or pay damages to the person or entity who is harmed by your violation.

What is a restrictive covenant in an employment contract?

A restrictive covenant in a contract of employment is a clause that limits an employee’s ability to work for a competitor as their new employer after leaving their current job. These clauses are designed to protect the employer’s business interests by preventing the employee from taking advantage of their knowledge and experience to benefit a competitor. Restrictive covenants can be found in both non-compete and non-solicitation clauses, and they are typically enforceable if they are reasonable in scope and duration. If you need help to enforce restrictive covenants within your employment contract, you can draft it with the help of our employment lawyers.

What are post-termination restrictive covenants?

Post-termination restrictive covenants for employees are contractual provisions that restrict an individual’s ability to compete with their former employer following the termination of their employment. These provisions are designed to protect the employer’s business interests, and can include restrictions on things like soliciting customers, using confidential information, or starting a competing business post termination. Specialist employment law solicitors can help you navigate through these clauses.

You have covenants in your contract – can you negotiate out of them?

Yes, you can negotiate out of covenants in your contract. However, it is important to understand what these covenants are and how they may impact your business before doing so. Otherwise, you may be inadvertently giving up important protections or rights.

What can your former employer do if you breach your post-termination covenants?

If you breach your post-termination covenants, your former employer may take legal action against you. This could include seeking an injunction to prevent you from breaching the covenants or claiming damages for any losses suffered as a result of the breach.

Are restrictive covenants in employment contracts legally binding?

Yes, restrictive covenants in employment contracts are legally binding. This means that if an employee violates a covenant, the employer can take legal action against the employee and take them to the high court. Restrictive covenants are often used to protect an employer’s business interests, such as trade secrets or customer relationships.

What is garden leave?

Garden leave is a period of time which employees from their former employer get where they are still employed by the company, but is not required to work. An employee on garden leave can be engaged in various things, such as taking time off before starting a new job, or preparing for a court case.

Can an employer forbid a worker from working for a rival for 12 months?

An employer will typically find it challenging to defend a 3 or even 12 months non-compete agreement. However, a lot relies on the employer’s industry, the employee’s level of seniority, and the employee’s access to sensitive data. 12 months will be reasonable in some circumstances for senior employees.

Does an employee have to consent to a contract with limitations?

A contract with restrictive covenants can be rejected by an employee. The employer may be asked to modify or delete the covenants at the employee’s request. Restrictive covenants are typical in employment contracts, though. Finally, the employer is free to reject any modifications. This might even cause the employer to revoke the job offer.

Employees are required to notify their employers as soon as they begin working if they do not wish to accept the restrictive covenants in their employment contract. This should ideally be done in writing. If not, the employee can be forced to abide by the limitations and can be in a situation where the employer claims a financial remedy.

Employment law solicitors

Such restraint of trade and non-compete clauses are created to protect a legitimate business interest and the employer can add restrictive covenants within a contract of employment. An employee entering into a restrictive covenant should be mindful of the clause and avoid breach of the covenants. Breach of any restrictive covenants is regulated by the solicitors regulation and action is likely to be enforceable by the employer. 

We can give you legal advice on how restrictive covenants may work and whether the restrictive covenant is essential. Our employment lawyers are highly experienced and can advice you on how to introduce a new restrictive covenant as a clause in an employment contract and protect your business, or explain you the different choices you have when facing the brunt of the covenant. Get in contact with us to know more!

Molly Somerville

Molly attended the University of Glasgow, graduating with an MA in Politics in 2014 before completing the Graduate-entry LLB at the University of Strathclyde. She completed her Diploma in Legal Practice at the University of Strathclyde in 2018. Upon completing her traineeship, Molly began work as a Solicitor with Complete Employment Solicitors.

Kara McGregor

Having qualified in 2017, Kara has gained significant experience in many areas of law. In 2020 she retrained in Employment Law, in order to be able to better advise her clients in this complex area. Kara joined Complete Employment Solicitors in May 2022.

Scott Stevenson

Scott joined Clarity Simplicity in January 2020. He has since completed his traineeship with the firm over a wide variety of areas of civil law such as dispute resolution, employment law and family law. Scott is now a qualified solicitor with Complete Employment Solicitors and enjoys working closely with his clients to help them achieve their goals.