Restrictive Covenants Guidance At Tinsdills

Restrictive covenants, including non-compete and non-solicitation clauses, generally aim to protect the interests, goodwill and confidential information of the employer and are therefore of the utmost importance to any business.

During the course of employment, an employee will be under various implied obligations to their employee including a duty to act in good faith (the duty of fidelity) and an obligation not to misuse confidential information. As a result, employees will be severely restricted in any activities that may be seen as competing with their employer whilst they are employed by them. However, once that individual’s employment has terminated, those implied obligations become significantly more limited and, in the absence of any express post-termination restriction, the employee will be entitled to, for example, compete with their former employer or use their employer’s confidential information (not amounting to trade secrets).

It is therefore vitally important to the goodwill of your business that, particularly in relation to more senior employees and those employees having access to sensitive business information, you seek to restrict the post-termination activities of your employees through appropriately drafted restrictive covenants. However, caution should be taken not to draft such provisions too widely or too onerously as, if restrictive covenants are found to unreasonably restrict the former employee’s ability to work, an employment tribunal could deem them unenforceable.

At Tinsdills, our team of specialist employment solicitors can assist your business in preparing contracts of employment which contain restrictive covenants appropriate to the nature and seniority of the employee’s role to mitigate the risk of such provisions being found to be unenforceable by a tribunal.