Post-termination restrictive covenants - could these be banned?

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Post-termination restrictive covenants - could these be banned?

View profile for Kirsty Hunt
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Post-termination restrictive covenants - could these be banned? 

This is unlikely but The Department for Business, Energy and Industrial Strategy has issued a consultation paper on proposed measures to reform post-termination restrictive covenants, namely to ban them or pay remuneration during the restricted period. 

What are post-termination restrictive covenants you say?

You know, those horrible clauses in your contract that don’t let you do anything after your employment ends… you can’t work within 5 miles of the company premises for 6 months, you can’t poach clients you have previously worked with, you can’t compete!

Understandable right?

Yes, businesses most definitely have a need to protect their interests and this is why so many employees will find these types of clauses in their contracts; however, restraint of trade clauses are actually void and therefore unenforceable. This is unless a business can show that it was genuinely designed to protect a legitimate business interest, it is no wider than reasonably necessary in order to do that and it is not contrary to the public interest.  

Therefore the proposal to ban these altogether seems very unlikely but I would agree there is definitely a need for change here. The consultation closes on 26 February 2021 so watch this space! 

Need advice on restrictive covenants? 

For further information, please contact Kirsty Hunt in the employment team on 0117 9350 939 or email kjh@watkinssolicitors.co.uk. Watkins Solicitors has offices in Southville and Fishponds, Bristol, and Bath City Centre.

 

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

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