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Our experience and legal services range from drafting employment restrictive covenants through to assisting where there is a dispute, whether from the employer or employee perspective. Do get in touch to find out more about us and how we can help you.
How to protect your interests as an employer with employment restrictive covenants?
Why are restrictive covenants important?
As an employer, ask yourself a simple question – will the individual possibly be in a position to damage your business success when they leave? If the answer is yes, deal with the problem when they join, not when they leave.
The key considerations for an employer to avoid any restrictive covenants proving unenforceable (see further below) are the reasonableness of the restrictions and the extent to which the employer can justify them.
See here for more on non-compete clauses and a recent case example.
Types of post employment restrictions
There are many different types of restrictive covenant, but the ones most commonly used, generally known as non-compete and non-solicitation covenants, are:
The risks for employers of overdoing it with restrictions cannot be over emphasised. If clauses are too widely drafted they may be found to be unenforceable in whole or in part. The employer should consider at the stage of drafting the level of legitimate risk to his or her business, adopting a proportionate and justifiable approach and be seen to explain this to the employee at the stage of drafting.
Covenants may also need to be reconsidered or renegotiated as employees become more senior. The best way to protect the employer in the case of any dispute later will be to have a paper trail showing the employer’s reasoning and that the employee was not coaxed into agreeing a very onerous clause. It is also generally important to break restrictions down into different clauses and to have a specific clause stating that the parties agree that the covenants are divisible so that if one aspect is found to be too wide and is unenforceable, other aspects may still be upheld.
If you need solicitor advice on employment restrictive covenants, please do get in contact, either as employer or employee.
Is your employment restrictive covenant enforceable?
Not all restrictive covenants will be enforceable. If they are drafted too widely (for example seeking to restrict an employee from working for a competitor within a wide area and for over 5 years would generally be considered a restraint of trade) your employee may challenge them.
As a general guide, you should be wary of seeking to restrict activities for more than 6 months and with a geographical extent which is wider than perhaps 5 to 10 miles at most. When finding that a covenant is unfair on an employee, a court can deem that covenant totally unenforceable or water it down.
In addition to getting good legal advice as to whether the clauses in your employment contract, if any, are likely to be enforceable, it is also vital to gather compelling evidence urgently.
Solicitors can also help. The next step would then generally be to prepare a detailed letter to the former employee setting out the allegations and demanding :-
The letter would also generally include sufficient details and evidence of the breach and make clear that in the event of non-compliance with demands, you will apply for an injunction.
Get in touch, whether employer or employee, if you need a solicitor for a post employment restriction dispute.