What Are Restrictive Covenants in Employment Contracts?

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What Are Restrictive Covenants in Employment Contracts?

2018-03-02T12:41:29+00:00 March 2nd, 2018|All, HR News, Recruitment|

Within every business there is information that the business would class as both integral and invaluable to its own success and it is not unusual for the use of this information to be restricted for employees that are ending their employment with the business. Restricting the use of this information by ex-employees and those soon to be ex-employees can protect not only your business but your customer contacts too.

Your competitors would find an employee of yours with knowledge of your business technology, strategic information and customer or client connections an extremely attractive asset to their business.

To protect your business from this happening there are certain terms implied into the contracts of your employees. However, an employer my seek to protect the use of business information during an employee’s time with the company and also after their employment and this can be done through the use of restrictive covenants.

Employers will often use restrictive covenants in contracts of employment for more senior and highly skilled staff when their employment begins with the company. By setting out the restrictive covenant in the contract from the beginning it will help deter employees from joining your competition but also warn off potential new employers looking to prise your talent away.

Typically, the restrictive covenant will be a clause in the employee’s contract that will prohibit them from competing with their ex-employer for a certain length of time after the employee has left the business. This will prevent ex-employees from soliciting or dealing with customers of your business by using the knowledge they have gained of your customer during their time working for you.

Do you have restrictive covenants in your employment contracts? If you think that you should, or you are not sure they are clear enough then why not give us a call? We would be happy to discuss your restrictive covenants, your employment contracts and any other recruitment or HR concerns and queries you may have. You can reach us on 01223 855441.