There are several types of restrictive covenant that can be included in employment contracts:
This restricts an ex-employee from working for a competitor, or setting up a competing business, and will be more pertinent if they had access to confidential know-how or pricing structures. The ex-employee would be prevented from taking this confidential or valuable information to a competing business. These clauses should be time limited in effect, generally three to six months from the employee’s leaving date.
This restricts an ex-employee from approaching a business’s clients and prospective clients after they have left. The covenant can name clients with whom the ex-employee worked or alternatively forbid contact with any un-named clients with whom they would have worked within a certain time period, generally the 12 months leading up to the end of their employment. Typically these clauses are also time limited to between three and twelve months from their leaving date.
This clause is an extension of the non-solicitation clause preventing an ex-employee from dealing with previous clients or contacts at all, whoever initiates the contact. Again, six to twelve months is the normal time period attached to such a restriction. Both non-solicitation and non-dealing clauses can be very helpful if your business is seeking to protect your commercial contacts and information, which can also be protected by confidentiality provisions but they are notoriously difficult to enforce.
This clause applies the same principles as the non-solicitation clause, but prevents an ex-employee enticing former colleagues to their competing or new business. They are principally used to restrict senior members of staff and do not prevent the poaching of junior staff. They normally have a post termination time limit of six to twelve months.
Once a member of staff has given notice, you could use a “garden leave” clause to prevent them from coming into the office, and prevent them from working during their period of paid notice. This is designed to remove their access to those clients, contacts and employees protected by the previous clauses. To achieve this, you can request your employees’ return items such as laptops, mobile phones etc and cleanse their “bring your own device” devices. Generally, time spent on garden leave reduces the length of the other restrictions.