Restrictive Covenants – Are you protected?

At a glance

Are your ex-employees free to compete against you?

Are you protecting your business and client base properly?

Non-competition restrictive covenants have been described by a leading judge as “the most powerful weapon in the employer’s armoury.”

Traditionally, courts have been reluctant to enforce non-competition restrictions but there is a growing trend of these types of restrictions being enforced.  In particular, as shown in the recent decision in Merlin Financial Consultants Ltd v Cooper, courts appear willing to enforce 12 month non-competition restrictions.

Of particular importance and relevance to businesses in the financial services industry, courts have also determined that a non-compete lasting for 12 months is common within the financial services industry and is reasonable, given the exceptionally strong relationship between the employee (as a financial adviser) and their clients.
Enforceability of restrictive covenants will ultimately depend on the facts and circumstances in each case. At Memery Crystal, we have extensive experience of drafting, advising on and enforcing post-termination restrictive covenants and we can help you protect your business.

Now is the perfect time to revisit your old contracts and arrangements to make sure you are protected.

If you would like to know more, please do get in touch using the details below.