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Restrictive covenants

Overview

In order to protect an employer's commercial interests, it is often commercially desirable to impose certain restrictions on an employee which will apply following the termination of the employment relationship. Employees may have knowledge of sensitive information in relation to their employer's business strategy, customer and/or supplier profile and pricing which they could use post-termination for their own benefit or for the benefit of a competitor. Accordingly, employment contracts will often contain specific restrictions to protect the employer's business interests post-termination.

Government to consult on non-compete clauses

In December 2020, it was reported that the government was to consult on non-compete clauses, specifically to assess if the law is targeted and reasonable around their usage. Whilst the aim will not be to ban them outright, it will be to assess if the laws do need changing in order to encourage higher levels of business competition. 

The consultation opened in December.