Restrictive Covenants

Signing or breaking a contract containing restrictive covenants can be a risky business. You need to understand how the restrictive covenant will affect you and your legal rights concerning the covenants.

What Is A Restrictive Covenant?

It is normal to have restrictive covenants in your employment contract. Restrictive covenants are in place to safeguard the personal interests of the business and protect confidential information about their customers and their operations.

A restrictive covenant is a clause in your employment contract prohibiting you from doing certain things during your employment and after your employment. An example of a post-termination restrictive covenant would be to prevent you from competing with your employer after your resignation. It is also referred to as a ‘non-compete’ clause. The clause can also prevent you from soliciting customers or employees for a certain period of time after your employment.

The general aim of a restrictive covenant for the employer is to prevent any former employees using information they gained in the course of their employment to help competitors. The length of the covenant will generally be how long the employer believes it will take for the information the employee possesses to go out of date.

Employers cannot place any restrictive covenant they wish. Any restrictive covenant must legitimately protect your employer’s business interests, and must not be unreasonably onerous for you to pursue your chosen career. 

Are Restrictive Covenants Enforceable?

The starting point of any dispute surrounding a restrictive covenant is that they are not enforceable as they are a restraint of trade and against public policy. The employer will therefore have to prove the clause is enforceable. In order to prove that the clause is enforceable, the employer must convince the Employment Tribunal that:-

• The covenant protects a legitimate interest; and
• The covenant extends only as far as necessary to protect that interest.

How Will The Tribunal Determine If The Covenant Is Enforceable?

When faced with a case regarding a restrictive covenant the Tribunal looks to a number of factors to determine its enforceability. 

These include:

• Breadth of activity contained in the covenant;
• Geographical area of the covenant;
• Amount of time the covenant lasts;
• Importance of the information the covenant seeks to protect; and
• If the covenant is a justifiable way to protect the employer’s interest.

What Is Considered A Legitimate Interest?

One of the key factors the Tribunal will look at is the interest the covenant is trying to protect. It needs to be important enough to warrant a restraint on the employees’ ability to trade in the future.

These interests can include:

• Protection of trade secrets;
• Protection of employer’s connection with clients; and
• Stability of the employer’s workforce.

How Can Monarch Solicitors Help?

Our specialist employment solicitors have decades of experience dealing with employment issues. They are well equipped to deal with a whole manner of different cases no matter how big or small. 

Our team have had great success negotiating settlement offers, taking claims to the Employment Tribunal, and many more. Every person we represent receives the same high quality of treatment and personal service.

Legal Costs & Service Transparency

If you are considering taking Court action due to a breach of employment law the legal costs should be weighed against the amount likely to be received in damages.

We know it’s important to your business that the legal costs of the dispute are kept under control so as to not affect your cash flow.

We’ll not only ensure that you’re aware of costs implications from the outset, we’ll provide you with step-by-step cost estimates or fixed fees for each stage of the work. We’ll also consider funding options to suit your business needs so you can be sure that our legal services are cost effective.

For more information regarding legal funding options, please click here for more information.

About Our Employment Team

At Monarch Solicitors, our employment lawyers have vast experience, expertise, and knowledge in resolving all kinds of domestic and international employment disputes, whether it be complex or technical or simply a disagreement over pay and working conditions.

We have particular expertise in relation to the following areas:

• Bullying and harassment
• Constructive dismissal
• Discrimination
• Employee grievance
• Employment tribunal representation
• Equal pay disputes
• Garden leave
• Maternity and family rights
• Redundancy
• Settlement agreements
• Unfair dismissal
• Unpaid wages
• Whistleblowing

Contact Our Employment Solicitors

Our expert employment lawyers are available to discuss your restrictive covenant claims.

Please contact our employment advisors for immediate assistance by sending an email to us at [email protected] and one of our employment solicitors shall call you back. 

Alternatively, please call our employment solicitors in Manchester on 0330 127 8888 for a no obligation discussion.

Monarch Solicitors are a leading UK law firm and our award-winning Manchester solicitors, London solicitors and Birmingham solicitors offer their legal expertise nationally and internationally.

We are also able to leverage an international network spanning across Hong Kong, Turkey and Dubai to provide seamless assistance with cross-border matters relating to restrictive covenants.