Restrictive Covenants

They do this by preventing former employees from using sensitive information, valuable skills, or contacts for a competitor. They usually apply for a specific period of time after employment ends and should be included in contracts or service agreements. It’s also important to update them when roles or company circumstances change.

Employees should also ensure they have a full understanding of any past restrictive covenants before beginning a new job.

The most common types of restrictive covenants are:

Non-competition covenants
These stop employees from working for a competitor or opening their own business that directly competes with yours.

Non-solicitation covenants
These prevent employees from approaching your clients to encourage them to leave your business. In these cases you will need to prove the employee approached your clients.

Non-dealing covenants
These stop employees from doing business with your clients, suppliers or existing employees and are useful because you don’t need to prove an approach was made.

Non-poaching covenants
These prevent former employees from poaching your employees from you.

Team move covenants
These prevent an employee from employing their former colleagues.

Garden leave clauses
These can give you protection by making an employee stay away from work and have no contact with other employees, clients or targets during their notice period.

Confidentiality clauses
These prevent employees from sharing confidential information while they’re employed and, if properly drafted, after they leave.

Intellectual Property (IP) clauses
These ensure any intellectual property rights created by an employee during their employment automatically belong to your business.