Restrictive covenants are a complicated and developing area of employment law. The employment solicitors at Wilford Smith have a comprehensive understanding of restrictive covenants and how they may be enforced, meaning that we expertly placed to advise on issues that may arise relating to restrictive covenants in employment contracts, shareholder agreements, settlement agreements, consultancy agreements and business sale agreements amongst many others.
What is a restrictive covenant?
A restrictive covenant is a clause, or a set of clauses, incorporated into an employment contract which seeks to restrict the actions of an employee after their employment has been terminated. Such clauses are also commonly included in director's service agreements. Restrictive covenants aim to protect the employer's commercial interests from the threat of former employees using insight into the confidential business operations gained in their previous role to achieve a commercial advantage in the future.
What types of restrictive covenants are incorporated into employment contracts?
Restrictive covenants typically fall into the following categories:
This prevents your employee from working for a competitor for a prescribed period following the termination of their employment. This will usually be for a period of six months but can vary between 3 and 12 months, depending on the seniority of their position.
Non-solicitation of clients
This aims to prevent your employee from having contact with your clients for a prescribed period after their employment has ended. Depending on the employee’s position, this may cover a period between three and 12 months. This will typically take the form of a ‘non-solicitation’ or ‘non-dealing’ clause.
This prevents your employee from poaching key employees from you after they have left.
Can I introduce restrictive covenants into a contract of employment retrospectively?
If you wish to introduce a new restrictive covenant into an employment contract or amend an existing one, after employment has commenced, you can do so with the consent of your employee. If consent is not given, you have two options:
Impose the change unilaterally
You can introduce a restrictive covenant without express permission; however, this may result in a claim for constructive dismissal if your employee resigns as a consequence. Yet, your employee may be seen to give implied consent if they do not object to the change.
Terminate the employee’s contract and offer re-engagement on new terms
This is risky as it may result in a claim for unfair dismissal. However, this might be avoided if you can show that you have a ‘legitimate business interest’ to protect.
Contact our Restrictive Covenants Solicitors
The employment lawyers at Wilford Smith have a well-earned reputation for proactive and robust representation. We regularly advise employers across England and Wales on a diverse range of employment law matters, delivering a service that is progressive, reliable and uniquely client-focused. We have the skills, knowledge and determination to achieve the best possible result for you, whatever your circumstances. Our solicitors will take the time to explain your options clearly without resorting to legal jargon and keep you up to date with all developments throughout your business with us.
For expert advice on a comprehensive range of employment law matters, call us today 01709 828 044 or complete our online enquiry form.