Are there different types of restrictive covenants?

The most common types of restrictions in employment contacts are: Non-compete clauses – to prevent ex-employees from working for a competitor for a specified length of time. Non-solicitation clause – to stop an ex-employee from approaching clients/customers to entice them away from the original business. Non-dealing clause – to prohibits an ex-employee from any dealing with clients/customers/suppliers, even if that person approaches the ex-employee first. Non-poaching of staff clause – to stop an ex-employee from enticing former colleagues to join a new company.

Are restrictive covenants enforceable?

Usually a clause in an agreement that restrains trade and prevents an individual earning a living is against public interest and not enforceable. But the law recognises that it is also in the public interest to allow businesses to legitimately protect themselves. Post termination restraints that are drafted correctly may be enforced by a court if they are no wider than necessary to protect a business’s legitimate interests.

What makes a restrictive covenant reasonable?

Post termination restrictive covenants may be viewed as reasonable if they are in a written agreement that is signed by the employer and employee, they clearly protect a legitimate business interest, and they are as narrow as possible in relation to the length of time of the restriction, the geographic area of restriction and the definition of the restricted activity.

Can I negotiate restrictive covenants I previously agreed to?

It is important to understand what exactly you agreed to in your employment contract. Obtain a copy of the signed contract, review the terms, and if necessary seek expert advice. In general, if the scope of the restriction is very wide, the duration excessive, or the geographic area of application wider than reasonable, there may be scope to negotiate covenants previously agreed to.

What if an ex-employee ignores a restrictive covenant?

If an ex-employee disregards the restrictive terms of an employment contract, quick action is needed to limit damage to legitimate business interests. If necessary a court order, called an injunction, may be applied for urgently to stop any action that is damaging a company. The new employer of the ex-employee may be joined in the court proceedings, as may current staff members who appear to be conspiring with the ex-employee to join a competitor. This may effectively therefore prevent further unlawful activity by all those people.

Can you avoid a dispute if you are hiring from a competitor?

There are steps that may mitigate the possibility of non-compete or breach of confidentiality litigation. For example, check whether there are restrictive covenants in the new employee’s previous employment contract; consider restructuring the new employee’s position for the duration of any restrictive covenants; and consider offering the competitor an amount to “buy out” the previous employee from restrictions.

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Post Termination Restrictive Covenants

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Employment and consultancy contracts often include post-termination restrictions - also known as restrictive covenants. These clauses are designed to limit an individual’s professional activities after leaving a business. Common restrictions include preventing the former employee or consultant from: working for a competitor, soliciting or dealing with former clients, attempting to win business from previous contacts, and poaching or recruiting former colleagues.

Employers use restrictive covenants to protect their business interests, sensitive information, and client relationships after a key employee or consultant departs.

However, from the employee’s perspective, these clauses can be seen as limiting their freedom to work, network, and continue their career. UK employment law recognises the conflict between protecting business interests and allowing individuals to earn a living. As such, the enforceability of restrictive covenants is assessed on a case-by-case basis, considering factors such as reasonableness, duration, and scope.

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Our experienced dispute resolution solicitors specialise in advising on restrictive covenants for both employers and employees. We are recognised for delivering proactive, strategic, and commercial legal advice that helps clients resolve restrictive covenant disputes efficiently and on favourable terms.

Whether you're a business looking to protect your interests after a key employee's departure or a senior executive facing a claim, we provide clear, pragmatic guidance tailored to your needs. Our team is skilled in early dispute resolution strategies and, when necessary, we act swiftly to pursue or defend injunctions—a common legal remedy in restrictive covenant cases.

We regularly represent clients in the financial services, technology, and manufacturing sectors, and are known for our ability to handle complex litigation with confidence and determination when disputes escalate.

Our cases

Advising a large group of independent financial advisors on restrictive covenants as they transition from one financial services company/network to another.
Securing a successful outcome, without court proceedings, for a former consultant in a dispute concerning copyright and confidential information said to have been obtained unlawfully from a competitor who was a larger consultancy.
Defending new employer of an individual who is accused of infringing database rights and misusing confidential information.
Negotiating an agreement to facilitate the employment by our client of the ex-director of a competing business.
Advising numerous large corporate entities on their strategic options in respect of the misuse of confidential information and breach of restrictive covenants across many sectors.

FAQs

Are there different types of restrictive covenants?
The most common types of restrictions in employment contacts are:
- Non-compete clauses – to prevent ex-employees from working for a competitor for a specified length of time.
- Non-solicitation clause – to stop an ex-employee from approaching clients/customers to entice them away from the original business.
- Non-dealing clause – to prohibits an ex-employee from any dealing with clients/customers/suppliers, even if that person approaches the ex-employee first.
- Non-poaching of staff clause – to stop an ex-employee from enticing former colleagues to join a new company.
Are restrictive covenants enforceable?

Usually a clause in an agreement that restrains trade and prevents an individual earning a living is against public interest and not enforceable. But the law recognises that it is also in the public interest to allow businesses to legitimately protect themselves. Post termination restraints that are drafted correctly may be enforced by a court if they are no wider than necessary to protect a business’s legitimate interests.
What makes a restrictive covenant reasonable?

Post termination restrictive covenants may be viewed as reasonable if they are in a written agreement that is signed by the employer and employee, they clearly protect a legitimate business interest, and they are as narrow as possible in relation to the length of time of the restriction, the geographic area of restriction and the definition of the restricted activity.
Can I negotiate restrictive covenants I previously agreed to?

It is important to understand what exactly you agreed to in your employment contract. Obtain a copy of the signed contract, review the terms, and if necessary seek expert advice. In general, if the scope of the restriction is very wide, the duration excessive, or the geographic area of application wider than reasonable, there may be scope to negotiate covenants previously agreed to.
What if an ex-employee ignores a restrictive covenant?

If an ex-employee disregards the restrictive terms of an employment contract, quick action is needed to limit damage to legitimate business interests. If necessary a court order, called an injunction, may be applied for urgently to stop any action that is damaging a company. The new employer of the ex-employee may be joined in the court proceedings, as may current staff members who appear to be conspiring with the ex-employee to join a competitor. This may effectively therefore prevent further unlawful activity by all those people.
Can you avoid a dispute if you are hiring from a competitor?

There are steps that may mitigate the possibility of non-compete or breach of confidentiality litigation. For example, check whether there are restrictive covenants in the new employee’s previous employment contract; consider restructuring the new employee’s position for the duration of any restrictive covenants; and consider offering the competitor an amount to “buy out” the previous employee from restrictions.