Are restrictive covenants worth the paper they’re written on?

Year Published: 2015

Yes so long as they are properly drafted and go no further than is necessary to protect the company’s legitimate business interests then they are likely to be enforceable.
Restrictive covenants must be reasonable in duration. Most restrictive covenants in employment relationships apply for somewhere between 6 and 12 months. Longer restrictions are more likely to be reasonable for senior employees or employees in specialist roles. However, whether a restrictive covenant is enforceable depends on the particular facts of each case. For example, if clients are locked into contracts with a business for a minimum period of time, this may justify a longer restricted period, because it is only at the end of the period that the business is likely to suffer damage as a result of solicitation by the ex-employee.
Restrictive covenants must also be reasonable in geographic scope. For example, it would be unreasonable to stop a solicitor working anywhere in the UK but it may be reasonable to stop them from practicing at any firm within a five mile radius for a period of six months.
There are other important factors to consider when drafting restrictions and so employers should consider taking further advice to ensure employees are signed up to bespoke contracts of employment which are tailored to an individual’s role.

Share This: