UK employment law recognises that a business
is very vulnerable when a senior employee or director decides to leave for
are often well-placed to take advantage of confidential information, strategic
plans, customer and client details or other information about their employer's
business, after the termination of their employment.
They may attempt to use
this information for the benefit of their new employer, or in order to set up a
rival business. This can seriously harm the former employer's business.
It is because of this that case law has
developed to enable businesses to include post termination restrictions within
the contracts of employment of employees who have access to valuable business
These restrictions can take many forms, and
can potentially prevent employees from doing the following once their
employment has come to an end:-
seeking to do business with your clients;
with clients who may make contact with the leaving employee;
in competition with your business;
to entice away other key employees of your business; or
confidential information obtained during their employment.
Many employers do not have any post
termination restrictions within their contracts of employment, meaning that any
leaving employee can essentially make contact with and do business with whoever
he/she wishes. This could potentially lead to big losses being incurred if a
key client is lost.
Alternatively, some contracts contain post
termination restrictions that are so outdated or poorly drafted that when a
business seeks to rely on the clauses for protection, the Courts deem the terms
Case law makes it clear that a post
termination restriction will only be deemed to be enforceable if it amounts to
a proportionate means of achieving a legitimate aim.
Clauses that are too
widely drafted, or last for an unreasonable length of time, may therefore
ultimately be worthless.
We would highly recommend that businesses review
their contracts of employment on a regular basis, and obtain advice as to
whether the terms of any post termination restrictions remain enforceable.