Restrictive covenants are terms in a contract designed to protect your employer’s business interests by preventing you using trade secrets, confidential information or client or customer relationships you gained in your employment to unfairly compete with them.
The terms of restrictive covenants will vary depending on the interests your employer wants to protect. Some common clauses prevent employees:
working for a competitor
setting up their own business
approaching clients of the business
working with clients of the business at all
recruiting colleagues to join a new workplace
making use of sensitive business information – for example, a customer database, knowledge of manufacturing processes, new product development or pricing information
Restrictions are only enforceable if they uphold a legitimate business interest. Covenants cannot be used purely to limit competition.
They must be no broader than reasonably necessary to protect the interest, which usually means they are limited to a time period or geographical area. If a clause is too broad it may be unenforceable.