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A restrictive covenant is a term in your employment contract that puts limitations on your ability to obtain employment when you leave your current employer. This can have serious restrictions on your ability to find another job and therefore they should not be entered into lightly. You must understand what impact these restrictive covenants will have and discover whether you can limit this impact.
Types of Restrictive Covenant
There are many different types of restrictive covenant, but the ones most commonly used are:
- restricting you from working for a competitor within a defined area
- restricting you from approaching or poaching clients or customers of your former employer
- covenants preventing you from dealing with former clients or customers even if they approach you
- covenants preventing you from recruiting other employees from your former employer
Validity of Restrictive Covenants
Not all restrictive covenants will be enforceable. If they are drafted too widely you may be able to challenge them. For instance, if your employer is a retailer and he attempts to restrict you from working for any other retailer within a geographic area, or a competitor that is hundreds of miles away. The more senior your position within the company the more likely it is that restrictive covenants can be enforced.
Seek Early Advice
If you have any doubts about signing a contract, you should seek advice before committing yourself to a covenant that could severely impact on your future employment. We can often provide fixed fee advice. This could save you both money and stress in the long-term.
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