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If your employment contract includes restrictive covenants, you may be wondering what they are and how to navigate them.
Restrictive covenants limit your actions for a specific period after your employment ends. For instance, there might be a 'non-compete' preventing you from competing with your former employer, or a 'non-deal' stopping you from engaging with certain individuals or companies.
While it's legally acceptable to have a restrictive covenant in your employment contract, it might not be enforceable if it's considered a restraint of trade.
However, in the event of a breach, if your employer can prove that the covenant aims to protect their legitimate business interests and is reasonable in scope, a court may side with them.
This could lead to expensive damages and even an injunction against you as an employee.
If you are looking for help navigating a contract with restrictive covenants, our solicitors at Huggins Lewis Foskett have the relevant expertise to assist you.
Why choose Huggins Lewis Foskett for your restrictive covenant?
Our team of employment law experts have decades of experience advocating for individuals across all employment levels, from job applicants and entry-level workers to senior executives and directors.
We specialise in various aspects of employment law including restrictive covenants and can provide clear guidance to help you understand your rights and anticipate the likely outcomes of any recommended actions.
Our commitment is to safeguard your employment rights and achieve the best possible results for you. Utilising effective negotiation skills and alternative dispute resolution methods, we strive to find positive resolutions without resorting to court proceedings. However, if court action becomes necessary, our team is equipped with the experience and advocacy skills to ensure a fair outcome on your behalf.
Our restrictive covenants service
Our solicitors are well-equipped to support employees with restrictive covenants.
We provide a range of services, including explaining the terms and implications of the covenants for employees considering signing a contract and ensuring they understand their rights and limitations.
We can assess whether a covenant is enforceable, or if it would be considered an unreasonable restraint of trade. If we consider the covenant to be excessive or unfair, we can negotiate with your employers to modify or remove certain clauses.
In the case of restrictive covenant disputes, our solicitors can guide you through alternative dispute resolution methods, aiming for an amicable resolution.
If necessary, our solicitors have the expertise to advocate for our clients in Employment Tribunals or in court, presenting a compelling case to help you secure a fair outcome.
Everything you need to know about restrictive covenants
What are restrictive covenants?
Typically found in employment contracts, restrictive covenants stop employees from competing with their former employer post-employment.
For example, a 'non-compete' clause prevents individuals from joining a competitor for a specific duration and 'non-dealing' clauses prohibit employees from working with specific clients for a certain period.
If you're an employee with these clauses in your contract, they may limit your choices when leaving the job, potentially delaying your ability to start a new position for several months.
These restrictions are essentially safeguards that businesses use, but employees must be able to understand and navigate their implications.
How are restrictive covenants enforced?
Restrictive covenants can be legally enforced but they must meet certain criteria in order to do so. To uphold a restrictive covenant, an employer needs to prove it safeguards a legitimate business interest. They must also demonstrate the clause's reasonableness, ensuring it only extends as far as necessary to protect the business interest.
The way the covenant is worded is important, as poorly-written clauses won't be enforced by a court. If it is excessively restraining trade, it may also be void. Therefore, it's vital for restrictive covenants to be well-drafted, reasonably limited in scope, and aligned with legitimate business interests.
If you receive a job contract with restrictive covenants, seeking legal advice is advisable. Our solicitors can ensure you have a thorough understanding of your contractual obligations and safeguard your interests.
Can I get a restrictive covenant removed?
It may be possible to reach an agreement to remove restrictive covenants from an employment contract.
However, both you and your employer must mutually consent to the removal of the covenants.
It's also possible to eliminate only a portion of a covenant rather than the entire clause.
Any modifications to the covenants should be clearly documented and signed by both parties to prevent them being enforced if you leave.
What are the different types of restrictive covenants?
The main types of restrictive covenants you may find in an employment contract include:
Non-solicitation clauses – These clauses seek to prevent you from actively contacting your former employer’s customers or clients. This may include approaching a contact of your former employer and asking them to engage in business with you, resulting in them losing a client.
Non-poaching and non-employment covenants – These covenants prevent an employee from poaching or employing members of their former employer’s staff when they leave, in order to protect their workforce.
Non-dealing clauses – These clauses prevent you from offering services or goods similar to those your former employer provides to their customers.
Non-compete clauses – These clauses are often considered to be the most restrictive as they aim to prevent an employee from joining a competitor or setting up their own business in competition shortly after leaving their former employer’s business.
How easy is it for employers to set restrictive covenants retrospectively?
It is best practice for an employer to ensure that any restrictive covenants are included in the employment contract initially. However, if the employer wishes to introduce a new restrictive covenant (or modify an existing one) after the employment has started, they can do so with your consent. If you don't agree to the contractual changes, your employer has two options:
They can unilaterally impose the change. If your employer enforces the change without your explicit consent, you may have grounds for constructive dismissal, where you are compelled to resign. It's worth noting that you could still provide implied consent through your actions, such as not objecting to the change even if you disagree with it.
They can terminate your employment and offer re-engagement with new terms. This is a risky move for employers, as the employee could claim unfair dismissal if the employer's actions are not perceived as reasonable.
Our restrictive covenant fees
We understand that the expenses associated with pursuing a claim against your employer can be a concern. That's why we make our pricing transparent upfront, allowing you to make an informed decision before taking any action.
In certain situations, your employer may cover the cost of your legal advice, particularly if you're offered a settlement agreement to resolve a dispute. In such cases, your employer typically pays for independent legal advice to ensure the agreement is legally binding.
If you cover your own legal costs, we'll keep you informed about fees and any other expenses, ensuring you have complete control over your spending. For an estimate of our fees, please refer to our pricing page.
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Speak to our restrictive covenant solicitors in East London today
Do you need clear, practical legal advice and representation for a restrictive covenant?
Call our restrictive covenant lawyers in East London now on 0208 989 3000 or use the simple contact form below and we will get back to you soon.
