Restrictive Covenants

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:- 

• non-competition covenants – an employee could not work for a competitor in similar role and use their knowledge of customers which is confidential information;

• non-solicitation covenants – an employee would not be able to poach clients/customers/suppliers;

• non-dealing covenants – an employee would not be able to deal with former clients/customers/suppliers, even if they approached the employee;

• 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.