Settlement Agreement – What is a Restrictive Covenant, and Will it Apply to the Employee? (Part 9)

A restrictive covenant is a clause that places certain limitations on the employee's activities after their employment ends. These limitations are meant to protect the employer's interests by preventing the employee from engaging in activities that could harm the employer's business.

The most common types of restrictive covenants in an employment settlement agreement are:

• Non-competition: A clause that prohibits the employee from working for a competitor of the employer, or from starting their own competing business, for a certain period after their employment ends.
• Non-solicitation: A clause that prohibits the employee from soliciting the employer's customers, clients, or employees for a certain period after their employment ends.
• Non-disclosure: A clause that prohibits the employee from disclosing the employer's confidential information to unauthorised parties, even after their employment ends.

It's important to note that the enforceability of restrictive covenants varies on a case-to-case basis and they may be considered unenforceable if they are overly broad or too restrictive.

If you have any questions concerning a settlement agreement, please contact Noel McNicholas on 01926 887700 or noel.mcnicholas@thomasflavell.co.uk.