Post employment restrictions

Many employment contracts contain restrictive covenants – clauses to try to restrict what you can do once you leave your employer.  Many are so poorly worded that it is near impossible to work out what they mean. Even if they are worded perfectly, it is sometimes the case that a judge will not agree they are reasonable.

You need someone who knows employment contracts inside out understands exactly and what an employer can and can’t do.

Whether you are seeking expert advice to negotiate the terms of a contract or advice on whether you can take a role you have been offered, or are facing threatening letters from your ex-employer after you’ve left – as expert employment solicitors, we can help.

It can often feel that your employer holds all the power – restrictive covenants look scary. They are likely to have experienced HR professionals or a solicitor working in the background.  That’s why you need the best support and advice available.  You need a specialist employment lawyer – one who will support you and help you identify how to limit risk. Because we advise businesses too, we know the tactics your employer will use – we know every trick the tricks in the book.

 

What can my ex-employer stop me from doing?

It depends on the detail in your contract and how senior you are in the business, but the most common types of restrictive covenants are:

Non-competition

Here your employer wants to prevent you from working for a competitor for a set period of time after your employment with them ends (usually 6, but sometimes 3 or 12 months).

Non-poaching of clients

This covenant tries to prevent you from communicating with clients/customers/contacts of your employer, usually for a set period of time after you have left (usually for 3, 6 or 12 months for more senior staff). The limitations can either be in the form of a ‘non-solicitation’ clause – or a more onerous ‘non-dealing’ blanket restriction.

Non-recruitment of staff

This is the non-poaching of key employees and is common for senior employees and executives.

Confidential information

There will always be a clause – either written into or implied in your employment contract – that you do not use commercially sensitive or confidential information belonging to your employer. This will typically include contact details of customers or clients, details of their orders, prices and ‘trade secrets’.

 

Can my employer really enforce the covenants?

Yes – so long as your employer has a legitimate business interest to protect. These might include customer connections, confidential information (such as trade secrets) and connections with suppliers.

Whether the restrictions are actually enforceable will always depend upon the particular circumstances of the case. However, the court will usually take the following into account:

  • Denying you the right to make a living in your chosen industry or profession is taken very seriously by the court and is unlikely to be enforceable on its own.
  • Your employer must be able to show that they have a legitimate business interest which requires protection. They cannot simply try to restrict you from working for a competitor just for the sake of it. They need to be able to show that your potential actions could have a detrimental effect on their business.
  • The clause must not restrain you any more than is reasonably necessary to protect your employer’s business. If the clause is too restrictive then it is likely to be struck out as unenforceable.
  • What is reasonable will depend on how senior you are within the business.

If you have enforceable restrictive covenants in your contract, your options once you leave can be severely limited. If you are not careful, this could leave you unable to start work with a particular employer for a 3-6 month period – possibly longer if you are senior.

We can help you negotiate an exit and try to get these restrictions reduced or even waived – especially if you have a potential constructive dismissal claim.

 

What happens if I do something I shouldn’t?

Most employers will treat a breach of a restrictive covenant as very serious and try to stop you from damaging their business interests.

If you are facing an injunction to stop you working or your former employer’s solicitor has sent a letter threatening you with court action or a claim for damages, you must get legal advice immediately from an employment law specialist.

You are usually only given a short time to respond to the threat of court proceedings.  It is very easy to say or do something that makes matters worse, leading to serious financial consequences for you. Ignoring the allegations could expose you to very substantial legal costs and damages.

We will identify your rights and responsibilities to your former employer and help you reduce or avoid any legal risks.

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