Protective Covenant Considerations In The COVID-19 Era

The growing unemployment rate caused by the COVID-19 pandemic may impact companies' ability to enforce post-termination covenants designed to protect them from unfair competition by departing employees. Narrowly-tailored protective covenants are vital tools in guarding a company's proprietary information and hard-won client relationships, among other legitimate business concerns.

With new employment opportunities at a premium, what should businesses expect from courts considering applications to enforce contracts that restrict a former employee's ability to accept a position with a competitor?

Interim Relief: The Initial Remedy in Protecting the Company

Protective covenants can include prohibitions on certain conduct for a period of time post-termination, including: