Restrictive Covenants
Well advised businesses will have terms in their contracts of employment, shareholders’ agreement or partnership agreement that restrict what a departing employee, director or partner can do after they leave.
These terms are generally referred to as restrictive covenants and may restrict a departing person from competing directly and/or poaching clients and employees. We act for businesses seeking to enforce restrictive covenants and for individuals who wish to avoid unenforceable restrictive covenants that are preventing them from starting a new job or new business.
Whether the company can rely on the restrictive covenants will depend on the precise facts and its own conduct.
An injunction may be the appropriate remedy and to obtain one the applicant must act quickly.
Where the departing individuals are setting up a business or helping others to compete using confidential information, it may be that the court will grant a Springboard Injunction preventing the defendants from getting an unfair springboard start to their new and competing business.
Call us to discuss whether you can use an injunction to enforce a restrictive covenant or to check whether your current restrictive covenants are likely to give your business effective protection.
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