Determining whether restrictions are enforceable

Practice notes

Confidential information and trade secrets in employment

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s...

Produced in partnership with Ruaraidh Fitzpatrick of Cloisters 15th Apr

Practice notes

Decisions on post-termination restrictions and garden leave in employment contracts

This Practice Note summarises key decisions on the enforceability of post-termination restrictions (restrictive covenants) in contracts of employment...

9th Apr

In-house

Practice notes

Incorporation of post-termination restrictions

For a post-termination restriction to be enforceable by the employer, it first has to be a contractual term; that is, incorporated into a contract...

9th Apr

Practice notes

Legitimate business interest

As noted elsewhere (see Practice Note: Restraint of trade), a post-termination restriction will be unlawful, and therefore unenforceable, unless the...

9th Apr

Practice notes

Restraint of trade

It is a basic principle of common law that an individual should be free to follow their trade or calling when, where and in what manner they wish....

9th Apr

Practice notes

Post-termination restrictions—severance

In order to be enforceable, the terms of a post-termination restriction must do no more than the minimum necessary to protect the legitimate business...

9th Apr

Practice notes

Garden leave and the right to work

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s...

9th Apr

Practice notes

Construing post-termination restrictions

The construction, or interpretation, of post-termination restrictions essentially follows the same rules of construction as are used in interpreting...

9th Apr

Practice notes

Post-termination restrictions—reasonableness

Even if an employer is able to establish that it has a legitimate business interest to protect (see Practice Note: Legitimate business interest) it...

25th Mar

In-house

Practice notes

Post-termination restrictions—the effect of repudiatory breach

A repudiatory breach of contract by the employer will usually mean that any express post-termination restrictions are not enforceable by the...

16th Mar

Q&As

Where a post-termination restriction has been agreed to in a document that is separate to the main employment contract, and the employer is in breach of an express term of the main employment contract, will such a breach by the employer affect the enforceability of the post-termination restriction?

For the purposes of determining what constitutes the content of the contract between the parties, it is necessary to bear in mind that a contract can...

11th Feb

Q&As

In relation to a non-compete post-termination restriction issued to an employee on their last day of employment, can the employer withhold pay until the employee has signed consent to the restriction?

There are two main issues to be considered in these circumstances. The first has to do with introducing a post-termination restriction into the...

11th Feb

Q&As

Is a clause requiring an employee to repay relocation costs if he terminates the employment contract within two years of the relocation void as a penalty clause, or as a restraint of trade?

It is common for employment contracts to allow the employer to recoup relocation, training and other expenses incurred by it in respect of the...

11th Feb

Q&As

Can an employer include in a contract with an individual who is not an employee, eg an intern, post-termination restrictions preventing the individual from competing with the employer?

You may wish to consider:•the duty of fidelity and confidential information•the effect of the doctrine of restraint of trade•the possible impact on...

11th Feb

Q&As

Can the employer enforce a restrictive covenant (post-termination restriction) if the employer dismisses the employee, eg by reason of redundancy?

An employee is freed from any post-termination restriction if:•there is a wrongful dismissal (ie a dismissal in breach of contract), or•the employer...

11th Feb

Q&As

How do I protect confidential information in the workplace?

What counts as confidential information? The legal definition of confidential information is information that is (i) confidential in nature, and (ii)...

2nd Feb

Q&As

Does the issue of whether there is valid consideration for the employee’s agreement to post-termination restrictions differ depending on whether the restrictions are introduced (a) before the employment begins or (b) during employment?

For a post-termination restriction to be enforceable by the employer, it first has to be a contractual term; that is, incorporated into a contract...

5th Dec

Q&As

What options are available to an employee to bring a claim if their employer’s business to business client contracts contain a provision requiring the client to pay to the employer a fee if the client employs any of the employer’s employees within a stipulated period, the fee in question being so substantial as to effectively prevent the employee from finding another job with any of those clients?

The combined skills of a trained and stable workforce have been held to be a legitimate business interest capable of protection by an employer....

5th Dec

Q&As

Is an employer able to enforce post-termination restrictions in the employment contract where (a) the employer has previously committed a fundamental or repudiatory breach of that contract, in response to which the employee did not resign and claim constructive dismissal, and (b) the employee’s employment is terminated some time later for unrelated reasons?

A repudiatory breach is a breach of contract that goes to the very core of the contract or one that shows that the employer no longer intends to be...

5th Dec

Q&As

When an employer wants to add restrictive covenants to an existing employee's contract, is it acceptable to give the employee a general pay rise with the new contract, or does the pay rise have to be a specified amount? Must the employer specifically draw the new restrictions to the employee's attention?

An employee's consent will be required for any variation to his contract of employment after his employment has started, including the introduction of...

5th Dec

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