Restraint of trade (or restrictive) clauses are often included in a contract of employment in order to protect the confidential information employees may gain during their employment and restrict what an employee may do with that information once they leave employment.
For restraint of trade clauses to be enforceable you, the employer, must be able to show that:
- The protection you seek is reasonable; and
- It is no more than is necessary to protect your business.
The term 'reasonableness' is assessed by Tribunals against a number of criteria that include:
- Length of the restraining clause
- Geographical spread of exclusion, e.g. within 3 miles of the place of work or throughout the UK
- The kinds of activity which are prevented, e.g. setting up a new office, working for a competitor, poaching staff
- The position and status of the employee
- The nature of the employment
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