Business Protection & Restrictive Covenants

Restrictive covenants are an absolute must for a prudent employer. 

The importance of well drafted restrictions

The employer too often realises that they should have put in place restrictive covenants once a key employee has left. 

Prudent employers should be thinking ahead and ensuring that their businesses benefits from well drafted restrictive covenants being included in the contracts of new employees and for such restrictions to be introduced to the contracts of existing employees if they are absent from the contracts at present. 

We are able to help to deal with this process and to ensure that the restrictive covenants introduced will stand up in Court.

The mood of the Court in recent years has been to side with the employer when assessing and enforcing post termination restrictive covenants.

Well drafted restrictive covenants are vital for employers because employees who are leaving are often in a good position to take confidential information and misuse their knowledge of strategic plans and customer and client information and other sensitive business information after they have left their employment. They might be tempted to use this for a new employer’s purposes or in order to set up a rival business of their own.  This can cause significant harm to the employer’s business. 

If there are no restrictive covenants in place then an employer can rely upon implied terms but these are very limited and do not generally help in relation to the period after the termination of the employment contract.

Express restrictive covenants, if they are well drafted, can put limitations on the employee’s conduct post-employment and prevent them from damaging the employer’s interests. They can deter employees from joining competing businesses and deter competitors from poaching employees.

Covenants should be tailored to specific employees and the business in which they are working. What might be appropriate for one employee might not be appropriate for another.

When the Court is looking at assessing the reasonableness of restrictive covenants, it looks at the following matters:

1. What the covenant means when properly constructed and
2. Whether the former employer has shown legitimate business interests requiring protection in relation to the employee’s employment.
3. Whether the covenant is no wider than is reasonably necessary for the protection of those interests

How George Green LLP can help you with restrictive covenants

We have an experienced team of employment law specialist who can assist with: –

• Drafting of restrictive covenants
• Introducing restrictions into existing contracts
• Enforcing your restrictive covenants including making applications to court for injunctions
• Protecting your confidential information