What are the different types of restrictive covenants?

Tosh Polpitye

18 December 2018

What are the different types of restrictive covenants in an employment contract?

The standard types of restrictions which can be used by employers are:

• non-competition covenants - restrictions on the former employee working in similar employment for a competitor;

• non-solicitation covenants – which prevent poaching of clients/customers/suppliers of the former employer;

• non-dealing covenants – which prevent a former employee from dealing with former clients/customers/suppliers, regardless of which party approached the other;

• non-poaching covenants – which prevent an employee poaching former colleagues.

For a restrictive covenant to be enforced it must not be drafted too widely. It will be for the employer, in the event of a clause being challenged, to show that the clause is justified and sufficiently narrow.

What are the different types of restrictive covenants? This is the question I put to expert employment law solicitor Thushara (Tosh) Polpitye.

Transcript

What are the different types of restrictive covenants? Expert employment law solicitor Tosh Polpitye will explain in this short video.

So I think the way to answer that is you need to think about what the purpose of the restrictive covenants is and it's to protect an employer from an employee's actions after they leave work essentially. So the types will be things like not stealing their clients, not dealing with their clients as probably one the most important things. Not doing anything that would damage the business or legitimate business interests in any way.

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