Restrictive covenants are clauses in an individual’s employment contract which place restrictions on what they can do for a specified period once they have left your employment. Common restrictions include “non-compete” which prevents them from setting up in competition with you, or “non-deal” which prohibits them from dealing with your customers or clients.
I am often asked the question as to whether or not these types of clause are worth it – are they enforceable?
The answer to that question is that it depends – it depends on how they have been drafted and whether or not they are necessary in order to protect a legitimate business interest. Drafted too widely and it is likely that they will not be enforceable and instead will be viewed as being in restraint of trade (in other words, preventing the individual from earning a living).
Drafted correctly they provide another tool in your armoury offering you and your business protection. They can lead to injunctions being granted in your favour and in some cases, a significant amount of damages being awarded.
But what about if you don’t have any in your contract or they are deemed unenforceable?
All is not lost. In this scenario, you may be able to rely on a breach of confidentiality as in almost all of these types of cases, the employee has accessed and used confidential information that they have come into possession of during their employment. In addition to express contractual terms, you can also rely on a breach of what is known as an “implied duty”. This includes an implied duty of fidelity, i.e., a duty to act in good faith and not to act against the interest of your employer.
So if you are having an issue with a former employee and need some advice about how to protect your business or if you would like us to carry out a review of the restrictions you currently have in place, get in touch at support@guardianlaw.co.uk or call us n 0115 8700150.
