Restrictive Covenants in UK Employment Contracts: What They Mean and How to Spot Them

What Are Restrictive Covenants?

Restrictive covenants are contractual promises that restrict your activities after you leave a job. They're designed to protect the employer's business — its client relationships, confidential information, and competitive position — during the vulnerable period after a key employee departs.

Most employment contracts contain at least one type of restrictive covenant. Senior roles typically contain several. The problem is that many employees don't read them carefully at the point of signing — and only discover their impact when they try to leave.

Non-Compete Clauses

A non-compete prevents you from joining a competitor or starting a competing business for a defined period after leaving. It's the broadest type of restrictive covenant and the hardest for employers to enforce, because it directly limits your ability to earn a living.

For a non-compete to be enforceable, the employer must show it protects a legitimate business interest (not just a desire to prevent competition), is reasonable in duration (typically 3–12 months in the UK), and is reasonable in scope (limited to genuine competitors, not your entire industry).

UK courts have applied these principles for over a century. In Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894], the House of Lords established that covenants in restraint of trade are prima facie void — only valid if the employer can show they are reasonable between the parties and in the public interest. In Egon Zehnder Ltd v Tillman [2019] UKSC 32, the Supreme Court confirmed that courts can in limited circumstances ‘blue-pencil’ (delete words from) an overly broad covenant, but will not rewrite it. If severing a word or phrase would change the character of the restriction, the whole clause falls.

For a detailed comparison of UK and US enforceability, see: Non-Compete Clauses: UK vs US

Non-Solicitation Clauses

A non-solicitation clause prevents you from actively approaching or pursuing your former employer's clients after you leave. This is narrower than a non-compete — you can still work in the same industry, you just can't go after specific clients.

Non-solicitation clauses are more consistently enforced than non-competes because they are more proportionate. However, the devil is in the detail:

• Does the clause only prevent you from soliciting clients you personally worked with, or all of the company's clients?
• Does it prevent you from working with a former client who approaches you independently (a ‘non-dealing’ clause by another name)?
• Is there a time limit? Non-solicitation without a defined period is likely unenforceable.

Non-Dealing Clauses

A non-dealing clause goes further than non-solicitation: it prevents you from working with your former employer's clients even if they approach you. You don't need to solicit them — the restriction is on any dealings at all.

Non-dealing clauses are harder for employers to enforce because they restrict even passive business. If a former client finds you independently and wants to work with you, a non-dealing clause prevents you from accepting. Courts scrutinise these more closely, particularly if the scope is broad.

Non-Poaching Clauses

A non-poaching (or non-solicitation of employees) clause prevents you from recruiting your former colleagues to join you at a new employer or venture. This protects the employer from losing multiple employees at once when a senior person departs.

These are generally considered reasonable and enforceable if they are time-limited (typically 6–12 months) and limited to employees you directly worked with or managed.

Confidentiality Obligations

Confidentiality clauses survive indefinitely in most contracts — there's no expiry date on your obligation not to disclose trade secrets or proprietary information. Unlike other restrictive covenants, confidentiality obligations are not subject to the same reasonableness test because protecting genuinely confidential information is always considered a legitimate interest.

The risk area: clauses that define ‘confidential information’ so broadly that they effectively prevent you from using general skills and knowledge gained during employment. Your general expertise, industry knowledge, and professional skills are not confidential information — but a poorly drafted clause might try to claim otherwise.

Garden Leave

Garden leave is not strictly a restrictive covenant, but it works alongside them. During garden leave, you remain employed (and paid) but are not required to attend work or contact clients. Your employer uses it to create a buffer period during which you lose touch with clients and market intelligence before your post-termination restrictions begin.

The combined effect matters: a 3-month garden leave period followed by a 12-month non-compete means 15 months before you can freely compete. When assessing your contract, always calculate the combined restriction period, not each element in isolation.

What Fair Looks Like

Reasonable restrictive covenants typically share these characteristics:

• Duration — 3 to 12 months for most restrictions. Shorter for junior roles, longer for senior roles with genuine access to strategic information.
• Scope — limited to clients you personally worked with, or a defined list of competitors, rather than entire industries.
• Geography — relevant to where you actually worked or where the employer's clients are located, not blanket global restrictions.
• Proportionality to your role — the same restrictions should not apply identically to a junior employee and the CEO. Covenants should reflect your actual access to clients and confidential information.

Red Flags to Check Before You Sign

These are the clauses most likely to cause problems. If your contract contains any of the following, take note before you sign:

• Non-compete covering your entire industry — a clause that prevents you from working for any company in your sector (not just direct competitors) is almost certainly too broad and likely unenforceable. But it can still generate legal costs to defeat.
• Non-solicitation with no time limit — any covenant without a defined end date is suspect. UK courts will not enforce an open-ended restriction.
• Non-dealing clause covering all the employer's clients — if you personally only worked with 10 clients, a non-dealing clause covering 500 clients is disproportionate. It should be limited to clients you actually had contact with.
• Confidentiality clause that includes your “general expertise” — this is an attempt to prevent you from using skills you developed. Courts consistently reject this; your know-how belongs to you.
• World-wide geographic scope — unless you genuinely had international client responsibility, a global restriction is disproportionate. Expect UK courts to disregard it.
• Garden leave + non-compete adding to more than 12 months combined — calculate the total buffer. Six months' garden leave plus a 12-month non-compete means 18 months before you can freely compete. Courts scrutinise combined periods above 12 months closely.
• Same restrictions applied to all staff regardless of seniority — one-size-fits-all covenants signal a template not a tailored contract. A junior developer and the CTO should not have identical restrictions.

FAQ

Can I ignore restrictive covenants if they seem unreasonable?

Not safely. Even if a covenant is likely unenforceable, breaching it invites legal action. The employer may seek an injunction (a court order preventing you from working), which means you could face legal costs and disruption even if you ultimately win. The safer approach is to negotiate the terms before signing, or take legal advice before breaching them.

Do restrictive covenants apply if I'm made redundant?

Technically yes — restrictive covenants survive termination regardless of the reason. However, courts are less sympathetic to employers enforcing covenants against employees they chose to let go. In practice, enforceability is weaker in redundancy situations, and some employment lawyers argue that compulsory redundancy may release you from post-termination restrictions altogether, though this is not settled law.

Can restrictive covenants be added after I've started the job?

New restrictive covenants introduced after employment has started require fresh consideration — typically a pay rise, promotion, or other tangible benefit. A covenant imposed without consideration may not be enforceable. This is another reason to read carefully before you sign the initial contract.

Are restrictive covenants enforceable in Scotland?

Scotland applies the same fundamental reasonableness test as England and Wales, but Scots law has historically been slightly more sceptical of non-compete clauses. The doctrine of ‘restraint of trade’ applies in both jurisdictions; the practical outcome is similar. If your contract is governed by Scots law, consider this when assessing enforceability.

Can I negotiate restrictive covenants before signing?

Yes — and this is the best time to do it. Most employers expect some negotiation. Common areas to push back on: duration (ask for 3 months instead of 12), scope (limit to clients you personally work with), and geography (limit to your actual territory). An employer who refuses any discussion on covenants is a warning sign in itself.

What happens if I breach a restrictive covenant?

The employer can apply for a court injunction to stop the breach, and can also claim damages for any financial loss suffered. In practice, injunctions are expensive for the employer and rarely sought unless they can demonstrate real harm. However, a threat of legal action alone can be disruptive, particularly if your new employer becomes involved.

Are the covenants in my settlement agreement different?

Settlement agreements often contain restrictive covenants that are separate from (and sometimes wider than) those in your original employment contract. Read them carefully. Settlement covenants are specifically negotiated at departure, and the consideration requirement is typically satisfied by the settlement payment itself, making them more reliably enforceable.

How does an employer actually enforce a restrictive covenant?

The usual route is an interim injunction application in the High Court. The employer must show there is a serious question to be tried, that damages would not be adequate, and that the balance of convenience favours granting the order. These applications move fast — sometimes within days — so taking advice immediately if a breach is alleged is critical.

Related: Employment Contract Red Flags · Non-Compete Clauses: UK vs US · Can Your Employer Change Your Contract Without Notice?

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