Restrictive Covenants in a competitive market
Posted on 7th July 2023 at 12:02
Ian has featured in Care Home Managament magazine, discussing how businesses can use restrictive covenants to protect their business in a competitive market.
The workforce in the Care Sector has shrunk by 50,000 leaving 95% of employers struggling to recruit staff, and 75% struggling to retain them. Employers might want to consider restrictive covenants to prevent staff poaching, stop employee's overworking at second jobs, and protect their investment in training, keeping the skills gained in the business.
However, restrictive covenants must be used wisely. The tribunal will not enforce clauses that are unreasonably restrictive, do not uphold a legitimate business interest, or are ambiguous or poorly drafted. The court will also not enforce excessive clauses that serve as a penalty, rather than to recover losses.
This is particularly relevant to the Care sector, but all competitive industries can benefit from restrictive covenants if used correctly.
Share this post: