Restrictive covenants in practice

We recently assisted an individual with post termination restrictions in their contract with their previous employer. THE PROBLEM: Our client was employed in the financial sector and signed a non-compete agreement at the start of his employment. This included an 8-month non-compete clause, without limitation as to geographical location. Our client also signed clauses preventing him from taking clients or staff with him in any new role. Our client was offered a new role within the financial sector. Our client’s position was that it was  not competitive with his previous role, given his relatively junior position and limited access to confidential information. Despite this his current employer indicated to him that they did view the new role as being competitive and said they would enforce the agreement if necessary. THE ACTION: We reviewed our clients matter in depth and provided him with detailed advice before planning a strategy. We set out our client’s position to his employer in writing, highlighting the various factors as to why the new role was not competitive and also why the clause was unenforceable. THE OUTCOME: The employer waived the right to enforce the clause and our client was able to start his new role. WHY IT MATTERS:  Restrictive Covenants can often seem daunting and can have a big impact on your career progression. In some cases however, the clauses can be drafted too widely, as was the case here, making them unenforceable. Restrictive covenants are only enforceable insofar as they protect a legitimate business interest of the former employer and any restraint on trade must be no greater than is reasonably necessary. An employer cannot simply stop you from working for a competitor without a justifiable reason.