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ARTICLE · 28 JULY 2015

Employment Restrictive Covenants In A Nutshell

What is a restrictive covenant and when will it be enforceable? A business can use restrictive covenants to protect its interests by restricting an employee's activities for a period of time after their employment has ended.

IrelandEmployment and HR

What is a restrictive covenant and when will it be enforceable?

  • A business can use restrictive covenants to protect its interests by restricting an employee's activities for a period of time after their employment has ended.
  • A restrictive covenant will only be enforceable if it protects a legitimate business interest, otherwise it will be regarded as an unlawful restraint of trade. The only recognised business interests are:

    • trade connections (including the relationship between the business's customers and its workforce); and
    • trade secrets and confidential information.
  • If the business has a legitimate business interest to protect, the restriction will be enforceable, provided it is no wider than is necessary to protect that interest. The covenant must be limited in terms of the restrictive activities themselves, and also apply:

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