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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:
Any clause that seeks to prohibit the poaching of employees will need to consider how long it will be before the outgoing employee's influence over other employees will be eliminated and replaced, and the scope of the classes of employees over whom such influence will exist. It is also important to remember that a poaching clause would usually rely on the employee actively pursuing and influencing an existing employee to leave their employment to join them, not the employee voluntarily leaving and simply using this as an opportunity to take up alternative employment, which just happens to be with that employee’s new business.
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