Beware post-termination covenants in your contract of employment. They could restrict your options when you move jobs.
It is usual for employers to insert clauses (especially into senior employees’ contracts) which seek to restrict their conduct post-termination. It is also, however, becoming more and more common for employers to put these into the contracts of junior employees. But what are they?
The types of post termination restrictive covenants which you may find in your employment contract are:
- Non- Competition Clause – This seeks to prevent you from working for a competitor in a similar role to the one you previously held, and also prevents you from setting up a competing business.
- Non-Solicitation Clause – This imposes a duty not to approach your ex-employers customers or prospective customers. Usually, this is with specific reference to those customers you had direct dealing with for the 12 month period prior to your termination date.
- Non-Dealing Clause – This is more onerous than a non-solicitation clause in that it prevents you from dealing with your ex-employers customers whether you encourage them or not. So if they approach you, the restriction would bite in the same way as it would by you soliciting them.
- Non-Poaching Clause – This aims to prevent you from taking key employees with you to your new employment or business
In order to be enforceable, the restrictive covenants will need to prevent you from one of the above activities for a set period of time after termination of your employment (usually 6, but sometimes 3 or 12 months). Read more..