Restrictive Covenants – Everything You Need To Know

Restrictive covenants will often be included in a service agreement for a senior executive with the aim of restricting an employee's activities after their employment has ended.

The purpose of restrictive covenants

Restrictive covenants are used by employers to protect business interests such as trade connections, (with customers, clients or suppliers), trade secrets, confidential information and maintaining the stability of their workforces.

Restrictive covenants are usually incorporated in the contract of employment. However, employers can also ask senior executives to enter into additional or amended restrictive covenants part-way through the employment relationship; for example, where employees are promoted or are transferred into new internal roles.