A contractual term restricting an employee’s activities after termination will be ineffective, unless the employer can show that the covenant:-
(1) is designed to protect the employer’s legitimate business interests; and
(2) extends no further than is reasonably necessary to protect those interests.
Whether an interest is considered a legitimate business interest will be depend on the business in question. The type of interests which employers seek to protect are:-
- trade secrets or confidential information
- customer connections or goodwill
- supplier connections
- employee connections
Post-termination restrictive covenants may seek to prevent you from:-
- competing
- soliciting customers or suppliers
- dealing with customers or suppliers
- enticing away employees
- using or disclosing confidential information
When considering whether a post-termination restrictive covenant is enforceable a Court would take into account the following:-
- the seniority of the employee
- the nature of business/activities of the employer
- the duration of the covenants
- the extent of geographical restriction
