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Restrictive Covenant Solicitors, London: Employment & Business Sales

Restrictive Covenants London

Restrictive Covenant Solicitors London

The term restrictive covenant in employment law generally refers to a clause in the employment contract that seeks to restrict the employee’s business activities once their employment comes to an end.

Employer companies often seek to protect their business interests by having their employees, workers or consultants sign agreements that contain restrictive covenant clauses. Those covenants are sometimes enforceable, but enforceable restrictive covenants will mean an individual could expose themselves to damages and other legal remedies should the disobey the terms of their restrictive covenants.

Because restrictive covenants can prevent employees with highly valued skills from deploying those skills to earn a living when their employment with a company ends, employers should note that, although they can protect their legitimate business interests, they cannot impose restrictions on former employees that go any further than that.

As an employee, it is important to note that restrictive covenants within an employment contract should not always be taken at face value. If a court finds that a post-termination restriction goes further than is reasonably necessary to protect a company’s legitimate interests, that restriction will be ruled an unlawful restraint of trade, and thus, unenforceable. An ex-employer must work hard to prove to the court that the covenants they have imposed genuinely work towards protecting the businesses best interests and are entirely reasonable and necessary.

At South Bank Legal, our expert restrictive covenant solicitors have many years of experience and have handled a range of cases and have insightful industry knowledge on the tactics large companies use to try and enforce unreasonable restrictions. If you are seeking advice, as either an employee or employer, on the enforceability of a restrictive covenant, please feel free to contact us for an initial discussion.

 

Restrictive Covenants in Business Sales

 

Restrictive covenant disputes arise time and again in the world of mergers and acquisitions or agreements for the sale and purchase of business assets. It will be common for the vendor of the shares or business assets to give restrictive covenants and undertakings not to solicit customers of the business or compete with it following completion of the transaction.

Agreements for business sales can include a range of restrictive covenants, including:

  • Non-solicitation of staff
  • Non-solicitation of customers or suppliers
  • Reputation and goodwill covenants
  • Geographic locations

 

Restrictive covenants in business sales must be reasonable and genuinely necessary for protecting the business in order to be enforceable.

 

What restrictions are imposed in UK employment contracts?

 

At South Bank Legal our restrictive covenant solicitors London regularly advise both companies and individuals on restraint of trade and confidential information issues arising out of service contracts, consultancy agreements and contracts of employment.

There are a number of restrictions that may be imposed within a covenant. Some of the restrictions most commonly imposed are:

  • Prohibiting the use or disclosure of the company’s confidential information.
  • Prohibiting the use by the individual of a trading name that is deceptively similar to the companies.
  • Prohibiting the individual from dealing with, or soliciting business from, the company’s clients and customers (commonly known as “non-dealing clauses” and “non-solicitation clauses”).
  • Prohibiting the individual from being involved in business activities that compete with those of the company (aka “non-competition clauses”).

 

Restrictive Covenant Solicitors London: Remedies for a breach of a restrictive covenant

 

Businesses seeking to protect their interests can commence court proceedings where alleging restrictive covenants have been breached. The party who benefits from the covenant, if they are successful in their court claim, can expect to obtain an injunction restraining the individual from committing further breaches, as well as financial compensation, which can take the form of either:

  • Damages, that is, the damages that have flowed from the breach, such as lost future earnings where a customer has been enticed away by an ex-employee; or
  • An account of profits, that is, the ex-employee will be ordered to account to the company by paying over a sum equal to the profits generated as a result of breaching the restraint of trade clause.

 

How can South Bank Legal’s restrictive covenant solicitors London help?

 

The enforceability of restrictive covenants can be complicated and usually requires specialist legal advice and assistance. Our employment law solicitors solicitors frequently act in cases where there is a dispute regarding a restrictive covenant.

We understand how overwhelming and disruptive legal proceedings and investigations can be and our restrictive covenant solicitors work tireless to provide timely and cost-effective legal advice and representation to our clients to try and minimise the disturbance.

Our offices are based in central London, close to nearby public transport links, but we act not only for London and UK based clients but overseas businesses and individuals enforcing or defending their rights under contracts containing UK exclusive jurisdiction clauses.

If you require advice on a restrictive covenant or restraint of trade clause, contact us online today for a confidential discussion.

South Bank Legal Solicitors is a commercial law firm, with offices based in London,. We are authorised and regulated by the Solicitor’s Regulation Authority (SRA).

If you require advice on the matters discussed above and are looking for a law firm with a good track record, regardless of whether you are a claimant or defendant, you can contact South Bank Legal today for a confidential discussion. We can be contacted via the form below, by email at info@southbanklegal.com or telephone on 0203 1266 584.

 

 

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