Solicitors in Manchester and london with expert advice on Restrictive Covenants
Signing or breaking a contract containing restrictive covenants can be a risky business. You need to understand how the restrictive covenant will affect you and your legal rights concerning the covenants.
What Is A Restrictive Covenant?
A restrictive covenant is a clause in your employment contract prohibiting you from competing with your employer after your resignation. It is also referred to as a ‘non-compete’ clause. The clause can also prevent you from soliciting customers or employees for a certain period of time after your employment.
The general aim of a restrictive covenant for the employer is to prevent any former employees using information they gained in the course of their employment to help competitors. The length of the covenant will generally be how long the employer believes it will take for the information the employee possesses to go out of date.
Are Restrictive Covenants Enforceable?
It is the starting point of any dispute surrounding a restrictive covenant is that they are not enforceable as they are a restraint of trade and against public policy. The employer will therefore have to prove the clause is enforceable. In order to prove that the clause is enforceable, the employer must convince the Employment Tribunal that:-
- The covenant protects a legitimate interest; and
- The covenant extends only as far as necessary to protect that interest.
How Will The Tribunal Determine If The Covenant Is Enforceable?
When faced with a case regarding a restrictive covenant the Tribunal looks to a number of factors to determine its enforceability.
- Breath of activity contained in the covenant;
- Geographical area of the covenant;
- Amount of time the covenants lasts;
- Importance of the information the covenants seeks to protect; and
- If the covenant is a justifiable way to protect the employer’s interest.
What Is Considered A Legitimate Interest?
One of the key factors the Tribunal will look at is the interest the covenant is trying to protect. It needs to be important enough to warrant a restraint on the employees’ ability to trade in the future.
These interests can include:
- Protection of trade secrets;
- Protection of employer’s connection with clients; and
- Stability of the employer’s workforce.
How Can Monarch Solicitors Help?
Our specialist employment solicitors have decades of experience dealing with employment issues. They are well equipped to deal with a whole manner of different cases no matter how big or small.
Our team have had great success negotiating settlement offers, taking claims to the Employment Tribunal, and many more. Every person we represent receives the same high quality of treatment and personal service.
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