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Drafting Contracts with Restrictive Covenants
Restrictive covenants may be written into contracts of employment to protect the interests of a business where, for example, the departure of a senior executive would carry risks of unfair competition for the business he or she leaves.
The employment solicitors at JMW have extensive expertise helping businesses draft contracts of employment with effective restrictive covenants. If you need help or advice ring us on 0345 872 6666 or contact us via the online contact form.
The Challenge of Drafting Employment Contracts with Restrictive Covenants
If the terms and conditions set are toothless, and do not prevent departing employees from bringing specialist knowledge, inside information or even team members to their new company, then they have achieved nothing. If, on the other hand, they overstretch themselves in setting limitations that are too strict, they may be dismissed in court as being unreasonable.
As these covenants are in restraint of trade, challenges to them can only be defeated if lawyers working for the employer can show that the terms that have been set are reasonable steps to safeguard the interests of the business without harming the employee's career. While 'reasonable' is not strictly defined, it has been taken to mean that post-employment covenants should have a limited timeframe, a limited geographical range, and should place only limited restrictions on the actions that the departing employee may undertake.
The activities to be restricted will vary with the position of an employee in an organisation. A senior employee, such as a department head, may be subject to stricter conditions than a person in an entry-level assistant role, as he or she will have access to more privileged information about a business and its workings and will be imagined to have a more significant effect on the fortunes of a competitor. Similarly, the nature of an organisation can affect the post-employment provisions that are made; a business with highly-valued trade secrets may be able to enforce stricter non-disclosure terms than one without such secrets.
This means that the process of establishing appropriate contractual terms must be bespoke to each new contract. The expertise that lawyers trained in drafting contracts can bring to this process, alongside their knowledge of case law and precedents, will help employers to find the balance between forceful and enforceable post-employment clauses at the recruitment stage - and, if necessary, to fight for their enforcement at the close of the employment relationship.
Restrictive Covenants and Employment Contracts Drafting From JMW Solicitors
The Employment Law department at JMW Solicitors contains the expertise necessary to draft the tailor-made contracts that senior appointments require, or to advise on the actions that may be taken if an employee has breached a post-employment covenant in an existing contract. We can also support you in the handling of a rogue employee in breach of their terms of employment.
JMW is a firm that combines commercial sense with legal acumen, providing high-quality advice and services to companies across the business spectrum. Whatever the employment law needs of your business, the partner-led team at JMW will be happy to discuss ways in which we can provide solutions.