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Tag Archive

When are Post Termination Restrictions Enforceable?

There is a common misconception amongst employers that if a contract is signed by an employee then the clauses contained within it, will be enforceable, regardless of the fact that a revised version might be substantially different. Where post termination restrictions, which predominantly relate to non-solicitation, non-dealing and non-competition, are unilaterally imposed, they may not be enforceable unless some form of consideration is paid.  

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The importance of a signed contract when enforcing post termination restrictions

Most businesses, will ensure that new employees receive an employment contract or at the very least some form of statement setting out their terms and conditions. Unfortunately not all businesses ensure that employee’s return a signed version of the agreement back. 

On dispute, if the company have an unsigned contract in their possession, this begs the question as to whether the clauses contained in the contract/agreement are enforceable against the employee. 

This question was examined by the High Court in FW Farnsworth Limited v Lacy. The court was asked to determine whether the employee was bound by the post termination restrictions contained within an unsigned version of his employment contract. 

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Are the restrictive covenants in your employment contracts enforceable?

If you are an employer planning on imposing new restrictive covenants upon your employees in the New Year then you should take note of the recent high court decision in Re-use Collections Limited v. Sendall & May Glass Recycling Ltd. The court highlighted the risk that employers face when amending contracts of employment to include or increase restrictive covenants where there has been no specific consideration.

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High Court Injunctions and Disciplinary Hearings

A rather interesting concept was dealt with recently by the Supreme Court via the case ofWest London Mental Health NHS Trust v Chhabra. The question before the Court was whether it could intervene to restrain an employer from requiring an employee to face allegations of gross misconduct at a disciplinary hearing if the conduct complained of is not sufficiently serious so as to support such a finding of misconduct.

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