Off the peg restrictive covenants on employment contracts - why they should be avoided.
26th May 2016
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Businesses rely on the quality of their competitive knowledge; the effectiveness of their delivery; and the nature of their supplier and client relationships. A new employee will begin to be entrusted with understanding about all these areas of the business when he or she joins the company.

Yet with that trust comes risk. Even the best recruitment process can’t ensure that a new recruit won’t one day prove impatient or disgruntled enough to leave for a competitor. When that happens, you may find your business facing competition from a company that now knows you from the inside out.

In order to help reduce this risk, businesses include restrictive covenant clauses in their contracts of employment. These ensure that the new employee cannot simply quit to join a competitor, putting all his or her training and inside information at the service of a rival.

Taking a short cut by copying restrictive covenants used elsewhere often means the restrictive covenant will be unenforceable – for a variety of reasons,

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About the Author

Catherine R

Member since: 20th February 2013

When it comes to financial advice, I offer my clients a high level and bespoke personal service that is rarely seen in today’s financial market place. As an Associate Partner at St. James’s Place Wealth...

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