Post Termination Restrictions: General Statement Or Solicitation Of Clients?

The Financial Services industry is no stranger to post termination restrictions or restrictive covenants. They are commonly used in order to protect business interests particularly when dealing with client facing roles such as independent financial advisers (IFAs) or insurance brokers.

A common restriction, and often one of the most valuable to most businesses will be the “non-solicitation of clients” provision. The purposes of such a restriction is to prevent the former employee from soliciting or poaching the customers or clients of the business for a period of time following termination, often 6 or 12 months. This can help limit the damage an individual leaving the business may do. This is particularly important for financial services where, given the nature of the services being provided, individual employees often build close relationships with their clients and there is often a strong relationship of trust.