Restrictive Covenant
A restrictive covenant in an employment contract is a clause that limits what an employee can do after leaving employment — for example by prohibiting them from working for a competitor, poaching colleagues, or soliciting clients within a specified period and geographical area. Restrictive covenants are only enforceable if they go no further than is reasonably necessary to protect a legitimate business interest. Courts may strike down or narrow unreasonable clauses.
UK courts apply a two-stage test: the employer must have a legitimate proprietary interest worth protecting (such as trade secrets, confidential information, or customer connections), and the restriction must be reasonable in scope, duration, and geography. Non-compete clauses typically range from three to twelve months; longer periods face greater scrutiny. Non-solicitation and non-dealing clauses targeting specific clients are generally easier to enforce than blanket non-compete clauses. Courts can partially enforce a covenant by severing unenforceable parts (the 'blue pencil' rule) where this does not change the character of the clause. The Government has consulted on capping non-compete clauses at three months but legislation has not yet been enacted (as of 2025). Employees should take urgent legal advice before breaching a covenant they believe is unenforceable.