What Is Restrictive Covenant? | HR Glossary | BambooHR
A contractual clause limiting an employee's activities during or after employment.
A restrictive covenant is a contractual term that restricts what an employee may do, usually after they leave, in order to protect the employer's legitimate business interests. Common types include non-compete, non-solicitation of clients, non-poaching of staff and confidentiality clauses.
The purpose is to guard trade secrets, client relationships and workforce stability, not to prevent an individual from earning a living. For that reason, courts in Ireland and the UK will only enforce covenants that are reasonable and no wider than necessary.
Well-drafted covenants are specific about duration, geography and the interest protected, and are tailored to the seniority of the role. Blanket clauses applied to all staff regardless of role are more likely to be found unenforceable.
