Restrictive Covenant

UK courts apply a two-stage test: the employer must have a legitimate proprietary interest worth protecting (such as trade secrets, confidential information, or customer connections), and the restriction must be reasonable in scope, duration, and geography. Non-compete clauses typically range from three to twelve months; longer periods face greater scrutiny. Non-solicitation and non-dealing clauses targeting specific clients are generally easier to enforce than blanket non-compete clauses. Courts can partially enforce a covenant by severing unenforceable parts (the 'blue pencil' rule) where this does not change the character of the clause. The Government has consulted on capping non-compete clauses at three months but legislation has not yet been enacted (as of 2025). Employees should take urgent legal advice before breaching a covenant they believe is unenforceable.

In practice, the clause you signed on day one is often far wider than what a court would actually enforce, and both sides know it. Employers use covenants as a deterrent; the real question is whether they would risk an injunction application, where they must show a legitimate interest, a proportionate restriction, and that damages would not be an adequate remedy. Seniority matters enormously — a restriction that is reasonable for a board director is frequently struck down for a junior employee who never held client relationships.

Worked example: Anna is a recruitment consultant whose contract bans her from working for any competitor anywhere in the UK for twelve months. She leaves for a rival agency in a different sector and different city. Her former employer threatens proceedings. Her solicitor points out that the clause is unlimited by geography and by sector, that Anna dealt with only a handful of clients in one niche, and that a twelve-month blanket ban goes well beyond protecting those connections. The employer settles for a narrower six-month non-dealing undertaking limited to Anna's former clients.

The common misconceptions are worth naming. An unenforceable clause is not the same as no clause — a court can sever offending words and enforce what is left, so you cannot simply ignore it. Covenants can survive dismissal, but generally not where the employer itself committed a repudiatory breach. And a restriction that was reasonable when you signed may be judged on the facts as at that date, not as at the date you leave, so a promotion without a new contract can leave an employer with a covenant drafted for a far more junior role.

Restrictive covenants work hand in hand with garden leave, your notice period, and the confidentiality terms in any settlement agreement. If you have received a warning letter or you are about to move to a competitor, read our guide to restrictive covenants first and take advice before you sign anything with the new employer.