Andrew Parascandolo
Employment Solicitor
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Phone: 01423 564551
Email: ap@powell-eddison.co.uk
Restrictive Covenants
What are Restrictive Covenants?
A restrictive covenant is a clause in your employment contract which prohibits you, as an employee, from competing commercially with your employer for a certain period of time after your employment comes to an end. In addition, restrictive covenants may be used by employers to prevent ex-employees from soliciting or dealing with customers of the business by using knowledge of those customers gained during his/her prior employment.
Are Restrictive Covenants Enforceable?
As a starting point, a restrictive covenant is unenforceable as it is deemed a restraint of trade and therefore against public policy. However, the Employment Tribunal has the power to examine the clause in detail and deem it enforceable if the employer can show:
the restrictive covenant is in place to protect his or her legitimate commercial interests; and
it only extends in so far as to reasonably protect those interests.
Acting for employees, our team can provide you with reliable legal advice as to whether a restrictive covenant in your Employment Contract is enforceable. We know the specific factors the Employment Tribunal will look at when it is deciding whether or not to enforce the restrictive covenant, and will fight hard to prove that it is unreasonable and affects your ability to earn a living.
To find out more about how we can help you, please call us on the number above or use our online form to contact us.
What Factors Will the Employment Tribunal Consider When Evaluating Whether or not a Restrictive Covenant is Reasonable?
The starting point is that any restrictive covenant clause is unenforceable. The onus is on the employer to prove that it is reasonable. Based on the evidence provided by your employer, the Employment Tribunal will look at factors such as:
the breadth of activities restricted by the covenant;
the geographical area covered;
the amount of time the restrictive covenant will be in place for;
the importance of the information or interests sought to be protected;
was the restrictive covenant a justifiable way of protecting the employer’s legitimate interests.
If you have been asked to sign a contract that contains a restrictive covenant clause, it is imperative that you seek professional legal advice before signing. If you leave your employer in the future and breach the restrictive covenant agreement between you and your employer, and the Court deems it enforceable, you will be in breach of your Employment Contract and your employer can serve an injunction on you to prevent future business activities and/or claim damages from you.
To obtain clear, concise legal advice on restrictive covenants and their enforceability, call us today
