Walking The Tightrope Of Restrictive Covenants

Restrictive covenants in employment agreements can often be a tightrope for employers. Ideally, those restrictive covenants would be as broad as possible. However, in order to be enforceable, any restrictions must go no further than is reasonable for the protection of the employer's business. This article explores the different types of restrictive covenants, the factors that are taken into consideration by courts in enforcing them and the importance of choosing the language of restrictive covenants carefully to minimize the chances of ending up in court.

What Are Restrictive Covenants?

A restrictive covenant is a contractual term of an employment contract that prevents an employee from engaging in certain activities during their employment and after the termination of the employment contract. It encompasses a wide scope of restrictions related to competition, solicitation of clients, suppliers and employees, and confidential information. Some of the most