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I have a question about restrictive covenants post employment. I resigned today and will be looking for a new role shortly. I may have the opportunity to take a role with a competitor. I have a Trust & Confidence Undertaking with the company that states: The Employee acknowledges and agrees that the Employee will obtain in the course of employment Confidential Business Information, personal knowledge of and influence over clients of the Company and any Associated Company and the Employee hereby agrees with the Company that in addition to the other terms of this agreement and without prejudice to other restrictions imposed upon him by law, that the Employee will not except in the event of a wrongful termination by the company during the restricted period (defined as 12 months): - hold any position either as a director, officer, employee, worker, consultant, contractor, partner, shareholder, principal or agent in any business which is or is about to be in competition with the Businesses in the Restricted Areas (defined as UK and Europe). My take on this is that the Restricted Areas are too broad and therefore this clause is not worth the paper it's typed on. As a side note, this Trust and Confidence Undertaking was designed with technical consultants in mind (the majority of our workforce) but as the HR Manager, I have no influence or dealings with clients at all. Background: My current organisation made it very difficult for me to return to work after maternity leave, as they tried to force a change to my working hours that would have made it impossible to attend work each day. I successfully fought this. My question is whether this clause is enforceable.
Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. Has the employer threatened to pursue you if you take the job you refer to?
No, they are not yet aware of the opportunity that I have.
Hi, sorry I lost my connection for a short while. Post-termination restrictive covenants are a rather common occurrence in employment relationships. An employer would want to protect their business from a departing employee's knowledge, business connections, influence over remaining staff, etc. However, a covenant that restricts an employee's post-termination activities will be automatically unenforceable for being in restraint of trade, unless the employer can show that it was there to protect a legitimate business interest and did so in a reasonable way.
Legitimate business interests (LBIs) are commonly accepted to include:
An employer cannot apply a restrictive covenant just to stop someone competing with their business, but it can seek to stop that person using or damaging their LBIs by using a reasonably drafted covenant.
Non-competition covenants prevent an employee from working with a competing business or setting up to work in competition with their ex-employer. Such general restrictions are seen as a restraint of trade and will be difficult to enforce. They will only be seen as reasonable if in the process of working in competition, the employee uses trade secrets or sensitive confidential information belonging to their ex-employer, or their influence over clients is so great that such a restriction is necessary. The length of the restriction and its geographical coverage will also be relevant and something for 12 months that covers the whole of the UK/Europe would most likely be unenforceable, unless there is something that is so specifically damaging to the company that they are trying to prevent, which I cannot see being the case here.
As you can see there are no hard and fast rules on restrictive covenants. Whether a specific restriction is enforceable will always depend on the individual circumstances, the interest being protected and whether it has been reasonably drafted. The above principles are what the courts will consider when deciding whether a restriction is going to be legally enforceable. It should give you a good idea of what to look for in your situation and decide what the chances of this being pursued further are.
This is incredibly helpful (and just what I wanted to hear!). Thank you.
You are most welcome, all the best