A recent Court of Appeal decision has refined how the courts approach restrictive covenants in employment contracts, with important consequences for the way they are drafted.
What the court decided
The court emphasised that a restriction must protect a legitimate business interest and go no further than is reasonably necessary. Broad, boilerplate covenants are increasingly vulnerable to challenge.
What employers should do
Review your standard terms, tailor covenants to the role and its access to sensitive information, and consider whether shorter, more targeted restrictions would be more enforceable.