Restrictive Covenants Are Void Except In Certain Circumstances

Restrictive covenants, such as those which seek to prevent solicitation of customers, clients, suppliers, other employees, or general competition for a defined period after termination, are standard in mid- to high-level employment contracts.

The general rule in English law, which has been adopted into Bermuda law by Supreme Court and Court of Appeal precedent, is that any contractual term which purports to restrict an employee's trade activities after termination of their employment is contrary to public policy and void as a restraint of trade; except to the extent that the employer can show:

• The term is designed to protect a legitimate proprietary interest of the employer, which: