Leaving employment - Contract of Employment

This term refers to the need to restrict employees once they leave employment. Whilst it is easy to write a clause into a contract the courts take a very restrictive view on such clauses. These normally apply only to specialist technical staff and senior managers.

Three areas of constraint should be considered firstly competing with the employer and secondly stopping employees soliciting customers, clients etc and thirdly the use of specialised knowledge gained in the course of employment.

Courts take a very restrictive view of these clauses, they are not likely to be enforceable for much longer than the normal notice period and certainly not longer than 12 months. There is some case law to suggest that the court will look at the total effect of the notice period and restriction clause. Companies must be able to demonstrate they have a clear objective reason for introducing such a clause (competitive industry, customer contracts, specific knowledge etc.). The danger of going for too restrictive a clause is that the courts will refuse to enforce any restriction at all.

Example Clauses

Following termination of employment for any reason, you will not for the period of 12 months thereafter directly or indirectly attempt to entice away or solicit any employee of the Company.

Following termination of employment for any reason, you will not for a period of 12 months thereafter take any action to solicit or assist any other person to solicit any commercial connection of the Company by offering any service which directly or indirectly substitutes for a service previously provided by the Company.

Each of the undertakings contained in each paragraph of this clause shall be enforceable by the Company independently of each other and each shall not be affected by any illegality or invalidity of any such other undertaking.

The undertakings contained in the above paragraphs are considered by the parties to be reasonable in all circumstances. If one or more should be held invalid as an unreasonable restraint of trade or for any other reason whatsoever but would have been valid if part of the wording thereof had been deleted or the period thereof reduced or the range of activities or area dealt with thereby reduced in scope, the said undertakings shall apply with such modifications as may be necessary to make them valid and effective.

Following termination of employment for any reason, the Manager shall not for the period of 12 months thereafter directly or indirectly attempt to entice away or solicit any employee of the Company

Following termination of employment for any reason, the Manager shall not for a period of 12 months thereafter take any action to solicit or assist any other person to solicit any commercial connection of the Company by offering any service which directly or indirectly substitutes for a service previously provided by the Company.

The Manager shall not at any time following the termination of employment for any reason represent himself to be held out by any person, firm or company as being in any way connected with or interested in the Company.

Each of the undertakings contained in each paragraph of this clause shall be enforceable by the Company independently of each other and each shall not be affected by any illegality or invalidity of any such other undertaking.

While the undertakings contained in these clauses are considered by the parties to be reasonable in all the circumstances, if one or more should be held invalid as an unreasonable restraint of trade or for any other reason whatsoever but would have been valid if part of the wording thereof had been deleted or the period thereof reduced or the range of activities or area dealt with thereby reduced in scope, the said undertakings shall apply with such modifications as may be necessary to make them valid and effective.