Restrictive covenants
Updated to reflect that the Government has published its response to its consultation on post-termination non-compete clauses.
In some countries, clauses that restrict employees from working for a competitor or setting up their own business after they leave are not enforceable unless the ex-employee is paid. But would this work in the UK? Justin T Tarka, employment lawyer at Ogletree Deakins, looks at the pros and cons.
As we reach the midpoint of 2022, HR professionals would be forgiven for losing track of all the live employment law proposals and what they mean for their organisation. To assist HR with planning for the rest of the year and beyond, we round up the major employment law changes in the pipeline as of mid-2022.
Model post-termination restrictive covenant clauses to prevent employees from engaging in competitive activities such as working for a competitor, or poaching or soliciting customers and/or employees.
In Ward v Fiducia Comprehensive Financial Planning Ltd, an employment tribunal upheld a claim for constructive unfair dismissal, finding that the employer had put inappropriate and excessive pressure on the employee to agree to an extended restrictive covenant following his resignation.
In Tillman v Egon Zehnder Ltd, the Supreme Court allowed the appeal and held that a six-month non-compete clause was enforceable because the unenforceable part of the clause was capable of being severed.
In Tillman v Egon Zehnder, the Court of Appeal held that a six-month non-compete clause that prevented the employee from being "concerned or interested in any business carried on in competition" after termination of employment was unenforceable as it would bar her from being a shareholder in a competing business.
The High Court has held that two ex-employees breached their contracts of employment by misusing confidential information belonging to their former employer's business. However, the High Court found that the employer had not suffered any financial loss and that it was entitled to only nominal damages of £1 from each employee.
In Theedom v Nourish Trading Ltd (t/a CSP Recruitment) and another [2016] IRLR 866 HC, the High Court dismissed an employee's libel claim in respect of emails sent by his employer about his misconduct.
HR and legal information and guidance relating to restrictive covenants.