Restrictive Covenants & Equal Opportunities
Restrictive Covenants in Employment Contracts
Employers can incorporate clauses into an employment contract so that an employee agrees to do or not to do certain things after leaving their employment, these are known as Restrictive Covenants.
What are the four types of Restrictive Covenants?
- Non Competing Covenants - seek to prevent employees working for a competitor or directly competing with an employer's business, usually within a set period or within a certain geographical area
- Non Solicitation/ Non Dealing Covenants - seek to prevent employees working with former customers or 'churning' customers by encouraging them to place orders for goods or services with a new employer, who may be a competitor, usually within a set period
- Non Poaching Covenants - seek to prevent employees recruiting former colleagues for a new employer, usually within a set period
- Restrictions on Use of Confidential Information – seek to prevent the use of confidential information by former employees
Restrictive covenants must go no further than what is reasonably necessary to protect an employer's legitimate business interests; otherwise they will be legally unenforceable. Proving that a restrictive covenant is reasonable depends on various factors such as the nature of the employee's job, whether the employer is local or national and whether the restrictive covenant covers all employees or just employees in certain roles.
Employers should have Equal Opportunities policies to promote equality, ensure fairness and comply with statutory requirements to avoid unlawful discriminatory practices which could expose employers to Employment Tribunal claims. An employer is responsible for the actions taken by employees during their employment and for ensuring that one employee does not knowingly help another employee discriminate against a further employee.
Equal Opportunities policies:
Equal Opportunities policies should cover all aspects of employment including:
- Job advertising, application forms and interviews
- Recruitment decisions
- Terms and conditions of employment including equal pay
- Employment procedures
- Access to training and promotion opportunities
- Prevention of harassment and bullying
- Preventing discrimination by clients/customers.
If you need assistance in drafting restrictive covenants or more information on how equal opportunities may impact you then contact us.
Our employment team are able to provide the appropriate advice and guidance in relation to Restrictive Covenants. They can arrange to meet you at any of our office locations in Market Harborough, Leicester or Wigston. You can call the team directly via 0116 212 1000, alternatively complete our online contact form and we will get back in touch with you.