Post Termination Restrictions
Restrictive Covenants or Post Termination Restrictions are a valuable tool in protecting a business from a departing employee by ensuring that confidential information, commercial connections and remaining workforce are secure.
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Whilst post-termination restrictions/restrictive covenants can be an effective way of securing your business, it can be a complex area with the risk that such restrictions are not enforceable, leaving an employer without the protection against former employees that it needs.
Our employment team can provide you with expert advice to establish an effective post-termination strategy including:
- reviewing your current level of protection.
- drafting post-termination restrictions in contracts of employment
- reminding employees of their continuing obligations on exit; and taking swift legal action when restrictions are breached.
- For new hires, we can review the contracts of employment with their previous employer to advise on the extent of their restrictions and how this could impact their role with the new employer.
- Enforcement of post termination restrictions including, where necessary and appropriate, seeking injunctive relief.
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How dare they join a competitor?
It is not every day we get the pleasure of a Judgment on the enforcement of post-termination restrictions as most…
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Frequently Asked Questions
Find answers to your most pressing questions about our services and processes.
What are post termination restrictions/restrictive covenants?
Post-termination restrictions are provisions that limit certain activities of an employee after their employment has ended. These restrictions are designed to protect the legitimate interests of the employer, such as confidential information, trade secrets, and client relationships.
What types of post-termination restrictions are most common?
Common post-termination restrictions include non-compete clauses, non-solicitation clauses, and confidentiality clauses.
Non-compete clauses restrict employees from working for competitors or starting a competing business. Non-solicitation clauses limit the employee’s ability to poach clients or recruit former colleagues, while confidentiality clauses prevent the disclosure of sensitive information.
The restrictions required will vary depending on the business interest which are being protected.
Are post termination restrictions unenforceable?
The general position is that post termination restrictions will be unenforceable as a restraint of trade unless an employer can show that the restriction goes no further than is reasonably necessary to protect a legitimate business interest. This means that restrictions must be reasonable in their drafting, scope and duration. The best starting point will always be identifying the business interest that an employer is looking to protect.
What should an employer do if an employee is acting in breach of their restrictions?
If an employer believes that an employee is acting in reach of their restrictions they should act quickly in order to protect their interests and limit any damage. We would always advise on taking professional advice as a first step. Our solicitors can review the restrictions and situation to advise on the most appropriate steps to take.
Restrictions can be enforced in the civil courts and potential remedies are damages for any losses as well as injunctive relief to prevent the employee acting in breach of their restrictions.
Not all disputes will need to be dealt with in court and it can often be resolved through other means such as undertakings.
What are undertakings?
Undertakings are essentially legally binding promises. An employee may be prepared to enter undertakings to confirm they will not act in breach or will cease from doing so. An employee may be prepared to enter into undertakings which the employer is comfortable with and as such resolve the dispute.
Undertakings are generally speaking easier to enforce that the actual post termination restrictions so offer a strong degree of protection if entered into