Post Termination Restrictive Covenants

In today’s competitive business landscape, protecting intellectual property, client relationships, and confidential information is more important than ever. This is where post-termination restrictive covenants can be very useful. These contractual clauses, including non-compete, non-solicitation, and confidentiality agreements, aim to safeguard a company’s interests after an employee or contractor leaves the organisation.

To be enforceable covenants must be reasonable and proportionate to the role being undertaken and the employer’s legitimate business interests. Our specialist employment law solicitors can advise on employment contract clauses that limit an employee’s actions after leaving a company and ensure as far as possible that they are enforceable.

Why Post-Termination Restrictive Covenants Matter

Post-termination restrictive covenants are crucial clauses in employment contracts that protect a business’s legitimate interests after an employee exits the company. If properly drafted, these clauses can be legally enforceable, helping employers safeguard sensitive information, client relationships, and commercial advantage.

At Warners Solicitors, our employment law solicitors are experienced in advising businesses on the strategic use of employment contract clauses, ensuring they are robust, compliant, and tailored to each role.

Enforceability of Restrictive Covenants

A restrictive covenant, such as a non-compete or non-solicitation clause, is only enforceable if it is carefully written and reasonable. For a clause to be enforceable, it must:

• Be appropriately limited in scope in terms of duration, geographical area, and restricted activities.
• Be necessary to protect specific legitimate business interests, such as client connections, confidential data, or workforce stability.
• Avoid placing an unreasonable burden on the former employee’s ability to secure new employment.

Our team can review your current contracts or draft bespoke agreements to ensure your restrictive covenants can be enforced

Permissible Scope of Restrictive Clauses

When proportionate and specific, restrictive covenants can be a powerful tool. Common types of post-termination restrictive covenants include:

• Confidential Information Clauses – Protecting sensitive data such as client lists, pricing structures, and intellectual property.
• Non-Compete Clauses – Preventing former employees from joining or starting a competing business within a defined area and period of  time.
• Non-Solicitation Clauses – Preventing former employees from poaching your clients, customers or prospective clients  for a specified period of time.
• Non-dealing- Preventing an employee from dealing with former clients or customers for a specified period of time.
• Non-poaching – Restricts your former employee from approaching previous colleagues to move to their business or another employer.

We will ensure your employment contracts reflect what’s legally permissible and commercially necessary.

Modifying or Discharging Restrictive Covenants

Post-termination clauses can be modified or discharged in certain circumstances. These include:

• Settlement Agreements – Often used during an exit to clarify, modify, or reaffirm restrictions in return for agreed terms.
• Negotiated Changes – Employers and employees can agree to amend or release covenants during the exit process.
• Legal Challenge – A former employee may dispute a clause they believe is overly broad or unenforceable.
• Public Interest Consideration – Courts weigh the wider impact of restrictions, particularly when they inhibit fair competition or employee mobility.

Frequently Asked Questions about Post Termination Restrictive Covenants