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New salary, new restrictions?

Posted on: February 23rd, 2021 by Ginny Hallam

It’s a good time of year to consider whether you have the right post-termination restrictions in place to protect your business.

Here’s what you need to think through…

  1. What are your key assets? Think carefully about what you want to protect, from customers, employees, suppliers, and tender information – it’s all capable of protection.
  2. Do you really need to stop employees from working with competitors when they leave? Difficult to enforce and off-putting to new starters, whilst well drafted non-compete provisions are potentially enforceable, they should be entered with caution and following advice.
  3. How long do ex-employees remain a threat to your business? Once their influence has disappeared you’ll not be able to limit their actions and your business becomes ‘fair game’. Ensure that the duration of the restrictions lasts only as long as the assets you’re trying to protect otherwise they will be unenforceable.
  4. What are you going to offer in return? It’s not possible to introduce new restrictions for existing employees unless you offer ‘consideration’ – so what form does that take? Extra holidays, salary increase, new role etc, whatever the case, it should be clear to the employee that the additional benefit is offered only in return for their acceptance of the new restrictions.

Get in touch if you’d like to discuss how our extensive drafting expertise can support you to introduce robust and enforceable post-termination restrictions into your contracts.

 

This update is accurate on the date it was sent (23 February 2021), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.