Restrictive Covenants
Restrictive Covenants in Employment Contracts
Restrictive covenants (also known as post-termination restrictions) are clauses in an employment contract that limit what an employee can do after leaving their role. Their purpose is to protect genuine business interests – such as client relationships, confidential information, or the stability of the workforce – rather than to prevent someone from working altogether.
These clauses are most commonly used where employees have access to sensitive information, strategic insight, key customer relationships, or influence over other staff.
The Most Common Types of Restrictive Covenants
Restrictive covenants typically fall into a few key categories:
| Type of Covenant | What It Restricts | Purpose |
| Non-Compete | Prevents working for a competitor or starting a competing business for a set time period | Protects competitive advantage and business strategy |
| Non-Solicitation | Prevents approaching or encouraging clients, customers, suppliers, or prospects to move | Protects client relationships and revenue |
| Non-Dealing | Prevents working with or providing services to former clients or customers, even if they approach first | Safeguards established commercial relationships |
| Non-Poaching / Non-Enticement | Prevents recruiting or encouraging current employees to leave | Maintains workforce stability |
| Confidentiality Clause (usually ongoing indefinitely) | Restricts use or disclosure of confidential information, trade secrets, and sensitive data | Protects business information and commercial value |
Some contracts also include non-disparagement clauses to prevent reputational harm, though their enforceability varies depending on how they are drafted.
When Are Restrictive Covenants Enforceable?
For a covenant to be enforceable, it must be reasonable. This means it must:
- Protect a legitimate business interest
- Be no wider than necessary in terms of duration, geographic scope, and activities restricted
- Not prevent an individual from earning a living altogether
The seniority of the employee and their access to confidential relationships or information are key considerations. The more influence an employee has, the more reasonable a longer or broader restriction is likely to be.
If drafted too widely or applied unnecessarily, a covenant may be considered an unlawful restraint of trade and therefore unenforceable.
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Why This Matters
Restrictive covenants can provide vital protection – but only when drafted carefully and reviewed regularly. Many covenants are unenforceable simply because they are generic or outdated.
Restrictive Covenant Support for Employers
We can help you:
- Draft and review restrictive covenants tailored to specific roles
- Ensure covenants reflect genuine business risks and are likely to hold up legally
- Respond to suspected breaches with clear guidance and decisive action
- Seek injunctions or damages where necessary
Addressing restrictive covenants proactively helps avoid disputes, protect client relationships, and maintain workforce stability.
Support for Employees
If you are leaving your role or considering a job move, we can:
- Review your contract and explain what your covenants mean in practical terms
- Assess whether restrictions are likely to be enforceable
- Advise how to proceed safely, reducing the risk of breach
- Support negotiations if your new role might conflict with your covenants
Getting legal advice early can help you move confidently into your next role.
When Should Covenants Be Reviewed?
Restrictive covenants should be reviewed:
- When the employment contract is first issued
- Whenever the employee’s role changes or they are promoted
- When responsibilities or seniority increase
- During the exit or resignation process
We support employers in keeping covenants current, reasonable, and enforceable, rather than outdated or copied forward from old contracts.
Get in Touch
Whether you are an employer looking to protect your business or an employee seeking clarity on your post-employment rights, we are here to help.
Contact us at enquiries@thrivelaw.co.uk to speak with one of our employment law specialists.
We will guide you towards a clear, practical and legally sound solution.
FAQs
Restrictive covenants are clauses in an employment contract (or sometimes a settlement agreement) that limit what an employee can do after they leave. They’re used to protect legitimate business interests: client relationships, confidential information, and the stability of the team.
The most common types are: non-compete clauses (restricting work for competitors), non-solicitation clauses (preventing approach to the employer’s clients or customers), non-dealing clauses (preventing any business contact with clients, whether the employee approaches them or not), and non-poaching clauses (preventing the recruitment of former colleagues). They’re distinct from confidentiality obligations, which apply regardless. Our blog on restrictive covenants covers this in more detail.
They can be, but not automatically. A restrictive covenant is only enforceable if it goes no further than is reasonably necessary to protect a legitimate business interest. The starting point in English law is that a clause in restraint of trade is void: the employer has to positively justify why it should be upheld.
Courts look at the scope (geography, duration, what’s actually restricted), the seniority and role of the employee, and whether the interest being protected is genuine. Courts can strike out parts of a clause that go too far, but they won’t rewrite one to make it work. A 12-month non-compete for a junior sales executive is likely unenforceable; the same clause for a senior partner with key client relationships is far more defensible.
The four main types are:
- non-compete (preventing employment with a competitor);
- non-solicitation (preventing approach to clients or customers the employee dealt with);
- non-dealing (going further by catching all contact, even where the client approaches the former employee first); and
- non-poaching (preventing recruitment of former colleagues).
Non-poaching and non-solicitation clauses tend to be easier to justify than broad non-competes. Non-dealing clauses can be harder to enforce because of the difficulty in limiting or controlling accidental or passive contact. The duration and geographic scope of each need to be calibrated to what the employer genuinely needs to protect; blanket clauses copied from template contracts are a consistent source of problems.
Possibly, depending on how the clause is drafted and whether it’s enforceable. Don’t assume a covenant is unenforceable simply because it exists, but also don’t assume it binds you just because it’s in your contract. The question is whether the clause would be upheld if the employer went to court to enforce it.
If you’re considering a move that might trigger a restrictive covenant, you should take legal advice before you resign or accept the new role. Enforcement typically happens quickly through an injunction, and by the time a claim is issued, the damage to the new employment relationship may already be done. Get in touch with our team to discuss your position.
Whenever an employee changes role significantly. A covenant proportionate for one job may be inadequate or unenforceable for another. They should also be reviewed when an employee’s seniority increases materially, when the business’s client base or competitive landscape changes, and as a matter of course every two to three years.
Covenants introduced later in an employment relationship require separate consideration of value given to the employee. If you’re updating contracts for existing employees, take advice on how to structure that process. Restrictive covenants introduced without proper process, or signed under pressure at the point of termination, are particularly vulnerable to challenge.
