Often employers will include restrictive covenants within employment contracts, which seek to restrict their employee’s freedom to work for a competitor in the future.
A common restrictive covenant found in an employment contract is a non-solicitation clause to restrict the ex-employee from soliciting the employer’s customers. They usually extend to customers with whom the ex-employee has had contact with during the course of their employment and will usually be limited to cover a specific period of time prior to the termination of the employee’s contract; for example, the last 6 or 12 months.
Another common restrictive covenant is a non-compete clause to restrict the ex-employee from working for a competitor. Usually this type of covenant will be limited in geographical scope to apply to competitors operating within a certain radius of the employer. (For example; within 10 miles of where the employer is based).
To be enforceable, a restrictive covenant must be reasonable. The employer must also have a legitimate business interest that requires protection.
These types of cases are very fact sensitive. You must consider the particular circumstances of the case, including the industry in which the employee and employer operate.
If the employee has held a position of responsibility and has had access to important information as part of their role, then their employer will also want to try and restrict their future use of that information. Employers will want to protect details of their customers, suppliers and business contacts. They will also want to protect other confidential information and ‘trade secrets’.
Price lists and client databases are examples of confidential information which an employer may want to protect. Trade secrets include confidential processes specific to the employer’s business, such as designs and methodologies.
However, not all information to which an employee has access can be properly described as ‘confidential’, especially if that information can be found within the public domain.
In order to enforce restrictive covenants, proceedings are brought in the Civil Courts, rather than the Employment Tribunal. If the employer is seeking an injunction, then proceedings will be commenced in the High Court.
If you require advice regarding the enforceability of restrictive covenants, then please get in touch with me or another member of our commercial litigation department on 0845 287 0939 or via our online contact form,