UK Employment Solicitors - http://www.employmentintegration.co.uk/

Restrictive Covenants Solicitor - UK Employment Law

SOLICITORS HELPLINE: ☎ 0330 660 7006

 

Our solicitors give specialised legal representation in employment conflicts to workers and/or individuals who reside in Manchester. With a possible significant amount of money in the balance, it is crucial that you get the help of an experienced and efficient employment law solicitor. Contact one of our restrictive covenant solicitors for advice at no cost and with no further obligation.

What is a Restrictive Covenant

A restrictive covenant is an agreement between an employer and an employee not to join in particular endeavours or enterprises subsequent to release from employment. New employment contracts often contain restrictive covenants. Some employers insist on a restrictive covenant clause to safeguard trade secrets and other business interests.

Clauses that may be inserted into restrictive covenants comprise provisions that prohibit competition with their former employer; petitioning clientele of their former employer; divulging or using classified knowledge; and/or soliciting or luring former workers away from their employer. The courts generally do not favour these covenants because they impede free enterprise. Courts require restrictive covenants to satisfy specific prerequisites.

4 Types of Restrictive Covenant

Four basic divisions of restrictive covenants exist: non-solicitation, non-compete, non-poaching of employees and preserving sensitive or guarded secrets or techniques regarding the business. To expound on each division or type, consider the following:

  • Non-solicitation: This specific covenant outlines a definite time frame in which the previous employee must not interact on any transactions with the former employer’s patrons.
  • Non-compete: In this covenant the former employee is specifically banned from directly competing with or making a deal for employment with any of their previous employer’s rivals.
  • Restrictive use of sensitive knowledge gained from employment: The former employee must not utilise or divulge occupational knowledge, trade secrets or other critical materials gained while employed.
  • Non-poaching of former fellow workers: The non-poaching covenant indicates a specific time-frame, which the employee must not try to lure his former associates to his employ.

Reasonableness of Restrictions

UK courts are distrustful when it involves restrictive covenants, due to the limits those impose on a person’s ability to make a living. Additionally, the employee usually has to make more concessions than an employer. Courts often look at restrictive covenants as unambitious or non-competitive; courts disagree with these covenants because competition between businesses benefits the public.

Due to those issues, courts cautiously examine restrictive covenants which they have to rule on. There are two essential elements that make a restrictive covenant legally binding. The restrictive covenant must safeguard a valid business interest and the restriction must not be overextended past the point where it is rationally needed to safeguard business interest.

The courts determine the judiciousness of a covenant by appraising the following elements of the contract:

  • duration
  • scope
  • the employee’s seniority
  • geographic limitations

If in the opinion of the court, the covenant is unreasonable in that its magnitude exceeds what is necessary in one or more of the elements, it will be deemed not enforceable. During the courts evaluation into the reasonableness of the covenant, the court will consider what kind of business the employer is engaged in.

Wrongful Termination

If the employer unlawfully terminates the employee, the employer might forfeit the right to implement the covenant entirely. Unlawful termination could be a breach of contract, which would void the contract, making the restrictive covenant invalid and not enforceable.

SOLICITORS HELPLINE: ☎ 0330 660 7006