It’s a common misconception that post-termination restrictions (PTRs) are unenforceable. A recent High Court decision shows that the devil’s in the detail when drafting PTRs you can rely on.
Background
Two former employees set up in competition with their previous employer and actively tried poaching business. Their previous employer brought a claim to enforce non-compete and confidentiality contractual provisions. The High Court held that it was perfectly reasonable for the employer to protect their confidential information and customer/supplier relationships as legitimate business interests.
Practical takeaways
Key assets – be clear about what you want to protect. Customers, employees, suppliers, tender information – all legitimate interests capable of protection. The more specific you can be in the scope of what you want to protect, the better chance you have in enforcing the restrictions.
Time-limited – in the case the Court held it was reasonable to enforce the restrictions because they had been specifically time-limited (12 months). The duration of restrictions should last only as long as the assets you’re trying to protect are reasonably at risk.
Role changes – don’t forget that if employees are moving into more senior roles, any PTRs should be reviewed and updated to reflect their progression and greater exposure to sensitive business information.
