The success of many businesses is founded on what they know and in safely holding onto confidential information.
When an employee leaves a business they often do so in possession of privileged information – for example the organisation's client lists, contacts, strategies, intellectual property, data and internal processes – which, if shared with a rival, can have damaging consequences.
As such, many businesses seek to enact restrictive covenants so that they are protected from the possibility of current and former employees sharing confidential and sensitive information with competitors.
Not only can this prevent employees from joining competitors it can also help prevent the poaching of staff.
If you are facing a challenge related to a restrictive covenant, speak with Oratto's member employment solicitors for help in upholding your full rights under the law.
When is a restrictive covenant enforceable?
In order to be upheld by a court, a restrictive covenant must meet certain criteria, including the following:
- It is proportionate
- It reflects a legitimate concern
- It is not overly restrictive of the employees choices
Time limits in restrictive covenants
There is no rule dictating how long a restrictive covenant may last – they may last for half a year, a whole year or, in exceptional circumstances, as many as several years. However, courts must be satisfied that the time limit being sought is reasonable and proportionate.
Post-termination restrictive covenants
Employees are not obliged to accept post-termination restrictive covenants. However, when employers have compelling reasons for introducing them, employees may find it is also in their interests to accept.
In the case of employees who have been working for an employer for two or more years, it may be possible to bring a claim for unfair dismissal if your employer has sacked you for failing to agree to a restrictive covenant. Employees of less than two years' service do not have this right.
Waiving restrictive covenants
In some cases employers may agree to waive certain restrictive covenants. However, the more influential and successful you are as an employee the less likely your employer is to agree to a waiver.
Restrictive covenants in settlement agreements
Oratto's employment solicitors can help you ensure your full rights if you have been offered a settlement agreement, which includes post-termination restrictions. We can help you ensure that you are not unfairly restricted and that you receive compensation where appropriate.
Oratto's restrictive covenant solicitors
Oratto's employment solicitors can advise you on any issue related to restrictive covenants, settlement agreements and your post-termination rights.
Whether you have worked in banking, brokerage, sales, technology or some other sector, our specialists can help you ensure your rights.
For further information on our services, or to discuss contacting a member employment lawyer, please contact Oratto today. Alternatively, use our Oratto Match facility so that we may suggest the member employment solicitors most suited to your case.