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Restrictive covenants

Restrictive covenants are commonly used in employment contracts to protect an employer's confidential information and customer relationships by restricting the ability of a departing employee to use information belonging to the employer. This might be while they are working out a period of notice and so still involved in the business or after they leave. We have extensive experience advising both individual employees and employers in circumstances where the breach (or potential breach) of these contractual provisions arise.

We also regularly advise clients in relation to the breach of restrictive covenants in sale and purchase agreements. Such contracts will typically include provisions which are intended to protect the purchaser of a business against the vendor setting up in competition once the sale has gone through.

Where it appears that a restrictive covenant has been breached, either in an employment context or otherwise, it is often necessary to take urgent action. If an ex-employee or vendor has set up a business in competition with the ex-employer or purchaser, the damage being done to the original business will be immediate. We take robust and decisive action on behalf of clients in these circumstances and if appropriate seek urgent injunctive relief from the court.

In conjunction with our Employment department, we also advise clients on preventative measures. In an employment context, this might be ensuring that employment contracts are drafted to protect an employer's business as far as possible such as including gardening leave provisions or providing relatively long notice periods requiring the employee to work elsewhere than the key area of the business concerned.

Our Guidance Note on restrictive covenants which summarises the key issues in this area is available to download.

Our experience

Our experience includes:

  • Acting for a leading home shopping retailer and financial services company in bringing injunctive proceedings against a former director for misappropriation of confidential company information.
  • Acting for market leader in horticultural supplies in protecting its customer database from misuse by a former senior employer. The database was recovered, the damage stopped and compensation was recovered.
  • Defending a former senior employee of a waste management company against allegations of misuse of confidential information.
  • Defending former employees of a company which designed and manufactured service control valves for high pressure industrial processes in the oil and gas industries. Our pragmatic approach ensured an early cost effective resolution to the action.

To speak with a member of our team specialising in claims involving restrictive covenants, please call 0844 980 1437 or send an email.