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BLOG: Restrictive covenants in contracts of employment, and what you need to know about them.

Alex Parkington

It’s not uncommon for people to move to different places of work as their career progresses but, should you look to change jobs, it’s important to check if your contract of employment contains any restrictive covenants.

This is because restrictive covenants may stop you from doing certain things once you leave your job and the consequences of breaching restrictive covenants can be both costly and severe.

What are restrictive covenants?

Restrictive covenants are binding conditions within a contract of employment. As the title suggests, they may restrict or altogether stop someone from doing certain things once they leave their job. For example, they may restrict where you can work in the future, who you can work for and what you are able to do with any clients or contacts that you have built up whilst in your job.

What can happen if I breach a restrictive covenant?

If you are alleged to have breached one or more restrictive covenants in your contract of employment, your former employers may threaten to issue court proceedings against you unless you bring the breach to an end and you may be asked to provide a sworn statement confirming that you will no longer breach the restrictive covenants in question.

If the breach continues after this point, your former employers may apply for an injunction against you, which is a court order compelling you to do or refrain from doing certain things. There are significant legal costs payable for a solicitor to respond to an injunction application on your behalf and, if your former employer’s injunction application is successful, they will try and recover their legal costs from you.

Can I negotiate with my employer if I want to move on?

You may be able to agree with your employers to vary the restrictive covenants in your contract of employment and/or they may agree that they will not take any action should you breach one or more restrictive covenants in your contract (i.e ‘waive’ them). This will likely depend upon factors such as the nature of the restrictive covenants and your job role so that your employers can determine what risks they may face should they either vary or waive the restrictive covenants.