A restrictive covenant is a clause which restricts the post-termination activity of any employees once they have left the business, affecting many issues such as confidentiality, solicitation of clients and the location of the business. Due to misapplication of these covenants, it can often be thought that they are not worth the paper they are written on, however, if drafted correctly, enforced and implemented well then it can be a powerful policy which will result in a successful restriction on an ex-employee’s activities.
When drafting restrictive covenants you need to ensure that they are reasonable or they will simply not be valid and enforceable. Restrictions will only be enforceable for the time limit stipulated within the covenant and this, again, cannot be unduly large, so again it is all about being reasonable.
So how long can restrictive covenants be enforceable? This is the question I put to expert employment law solicitor Thushara (Tosh) Polpitye.
How long can restrictive covenants be enforceable? Tosh Polpitye expert employment law solicitor will explain in this short video.
So the way to think about it is, the purpose of the restrictive covenant is to protect a legitimate business interest, so how long it depends on the seniority of the employee generally or how important it is within the industry to protect that person. So a director, for example, will have a longer period of restriction, so maybe one year and most employees would have somewhere between three to six months. The period of the restriction is just enough time for the company to be able to reconnect with their clients or their suppliers or whoever their customer base is and then after that period of times you can't really connect to them where the law basically says well then anybody can go to them.
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