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Tag Archive

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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Can drafting errors have any effect on the enforcement of restrictive covenants?

Whenever employees exit a business, one of the first things that crops up for both the employer and employee is the enforceability of restrictive covenants.

Usually my response is; providing that the restrictions are fair, reasonable and necessary in protecting the company business, they are likely to be deemed to be enforceable by a court. However, the question that frequently follows is how enforceable are ill-drafted restrictive covenants?

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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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How enforceable are restrictive covenants?

Restrictive covenants (“RCs”) are the contractual terms restricting an employee’s activities after termination and are often critical to some employer/employee relationships, particularly where the employee concerned is senior or vital to the employer’s business. Over the last few years the courts have given them a new lease of life, though it remains a complex area of law where mistakes are frequently made both by employers and employees.

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