The Ties That Bind (Or Not)…Restrictive Covenants, Part I

The start of an employment relationship is, in some respects, like the start of a romantic relationship. Seasoned executives become giddy with the prospect of a new love, er, recruit. "He/she is perfect! I want him/her to start tomorrow!" they say to their employment lawyer. To which we say (among other things): "Do you want the employment agreement to have a restrictive covenant?"

"Weren't you listening? I said they are perfect! And starting tomorrow! Why do we need that?"

In fact, you don't need a restrictive covenant for most employees. In certain circumstances, however, you may be particularly vulnerable. For instance, the employee may have or be expected to develop special relationships of confidence and trust with other key employees, customers or suppliers, making your business vulnerable to the employee soliciting them after termination of their employment. The employee may have, or develop, special knowledge and relationships critical to your business,