Restrictive Covenants for Senior Employees: Drafting Clauses That Courts Are More Likely to Enforce
Losing a senior employee can be unsettling. They may know your strategy, pricing, key clients and your team’s strengths and weaknesses. If they move to a competitor or set up on their own, that knowledge can quickly turn into a commercial threat. Restrictive covenants are one of the main tools employers use to manage this risk, but they only work if they are carefully drafted and grounded in current law.
This article explains why post-termination restraints matter, how the courts in England and Wales approach them, and what employers can do when drafting covenants for senior staff to improve the chances that they will be enforced if tested.
This is general information only and does not constitute legal advice. You should obtain specific advice on your own circumstances before taking, or refraining from, any action.
Why do restrictive covenants matter for senior staff?
In many businesses, a relatively small number of senior people hold the most commercially sensitive information and relationships. They may control key accounts, lead specialist teams, or have detailed knowledge of upcoming plans. If they leave and immediately join a rival, or take staff and clients with them, the commercial impact can be significant.
Confidentiality clauses and general duties of fidelity provide some protection, but they have limits. Once employment ends, implied duties fall away, and not all information qualifies as “confidential” in the legal sense, particularly where it is already known in the market or readily accessible. Properly used, restrictive covenants can help bridge that gap. They allow employers to impose carefully defined limits on what former employees can do for a short period after they leave, giving the business time to consolidate relationships, safeguard information and adjust.
As a matter of market practice, senior employment contracts often combine post-termination restrictions with garden leave provisions. Garden leave regulates what happens during the notice period, while covenants regulate a limited period after employment ends. Used together and drafted proportionately, they can provide a more robust protective framework than either tool alone.
Types of Restrictive Covenants in Employment Contracts
In employment contracts in England and Wales, restrictive covenants usually fall into a handful of recognised categories:
- Non-compete clauses, which seek to prevent a former employee from working for a competing business or setting up a competitor for a defined period in a defined field or area.
- Non-solicitation clauses, which prevent them from actively approaching your existing or recent customers or clients for competing business.
- Non-dealing clauses, which go further by prohibiting them from doing business with certain customers at all, whether or not they make the first approach.
- Non-poaching (or non-enticing) clauses, which restrict attempts to recruit specified colleagues, often those in senior, specialist, or otherwise key roles.
For senior roles, employers often use a package of these restrictions. For example, a contract might prohibit working for named competitors or within a particular business segment, prevent dealings with clients the individual had material contact with in a previous period, and restrict approaches to employees in specified roles.
Which covenants are appropriate will depend on the nature of the role, the risks to the business, and what is typical in your sector. It is rarely advisable simply to copy clauses from another contract or a precedent without considering how they would apply to the specific employee and business context.
How do courts in England and Wales approach enforcement? (law and legal tests)
Under English common law principles, clauses that restrain an individual’s ability to work or trade are treated as restraints of trade and are presumed unlawful unless the employer can show that:
- The clause protects a legitimate business interest; and
- The restraint goes no further than is reasonably necessary, as between the parties, to protect that interest.
Legitimate business interests recognised by the courts include protecting confidential information, customer and client connections, and the stability of the workforce. Protecting an employer from ordinary competition, on its own, is not sufficient.
Reasonableness is assessed at the time the covenant was agreed, not with hindsight once a dispute has arisen. When assessing reasonableness, the court will consider factors such as:
- The employee’s role and seniority;
- The nature of the employer’s business;
- The scope of the activities is being restricted;
- Any geographical limitations; and
- The duration of the restraint.
Longer periods and broader scopes require stronger justification. More modest, well-targeted restrictions are generally more likely to survive scrutiny, though the outcome always depends on the specific facts and the evidence available.
Courts are cautious about rewriting parties’ agreements. If a covenant is drafted too widely, the court may decline to enforce it at all rather than cut it back to what might have been reasonable. Employers, therefore, run a genuine risk if they draft covenants “as widely as possible” in the hope that something will be salvaged. In practice, a series of carefully judged, proportionate restrictions will usually offer better protection than one sweeping clause that tries to cover every scenario but is vulnerable when tested.
Because this area relies heavily on case law, and because working patterns and business models evolve, outcomes can shift over time. Periodic review of standard covenants is important to ensure they remain consistent with current judicial trends and any relevant legislative developments.
Drafting restrictive covenants that are more likely to be upheld (guidance and practice)
When drafting restrictive covenants for senior employees, proportionality and precision are key. A sensible starting point is to identify the specific interests you are trying to protect, which clients, what kind of confidential information, which teams, or markets, and then design restraints that address those interests directly.
For non-compete clauses, this may mean limiting the restriction to specific types of competing business, certain functions, or particular markets. A blanket prohibition on working anywhere in a broad sector is harder to justify than a clause targeted at activities the employee was actually responsible for, especially in large or diverse industries. You should also consider realistically how long confidential information or relationships are likely to remain sensitive in that market.
For non-solicitation and non-dealing clauses, it is usually safer to focus on customers or clients with whom the employee had material dealings during a recent, defined period (for example, the previous 6 or 12 months), rather than trying to cover the entire client base. That approach supports the argument that you are protecting existing goodwill rather than simply preventing competition. Similarly, non-poaching clauses should normally target particular categories of staff whose departure would genuinely damage the business, rather than attempting to apply to every employee regardless of role.
The drafting itself matters. Very broad, catch-all definitions can create uncertainty and increase the risk that the clause will be interpreted as wider than reasonably necessary. Clear definitions of terms such as “restricted business”, “restricted customer” and “restricted employee”, anchored in the reality of the individual’s role and the structure of your business, help both at the drafting stage and in the event of later enforcement.
Timing, promotions, and changes in role
Restrictive covenants are not “set and forget” clauses. They work best when they reflect the role the employee actually holds. A covenant agreed when someone joins in a relatively junior position may not be a good fit once they have been promoted several times and are responsible for different parts of the business.
Promotion is, therefore, a natural point to reassess covenants. If an employee is taking on significantly more responsibility or greater access to sensitive information and client relationships, it is sensible to consider whether existing restrictions remain appropriate and, if not, to agree on updated terms. This may involve new covenants in a promotion letter or a replacement contract. As a matter of good practice, employees should be given a real opportunity to consider those changes and to seek independent advice if they wish.
Introducing or tightening covenants mid-employment, without any accompanying change in role or other benefits, is more sensitive and can create both legal and employee relations risks. The safest way to structure such changes will depend on the circumstances, and it is generally prudent to take specific advice before attempting significant unilateral changes to existing covenants.
Practical enforcement: garden leave, injunctions, and commercial reality
Having well-drafted covenants is only part of the picture. Enforcing them requires a thought-through strategy.
In many cases, the first step when a senior employee resigns is to remind them of their ongoing obligations and seek appropriate undertakings. Where there are pressing concerns, for example, clear evidence that a senior individual intends to join a direct competitor and take clients or staff, employers may consider seeking urgent injunctive relief from the High Court to restrain breaches and preserve the position until a fuller hearing.
Garden leave clauses can be a useful complementary tool. Requiring a senior employee to serve their notice period away from the business, while remaining employed and bound by their contractual duties, can reduce the need for very long post-termination covenants and give you time to reassign responsibilities and consolidate relationships. However, garden leave should be used proportionately and in line with the contract. Excessive or unjustified use can lead to claims, including arguments that the employer has breached the implied term of mutual trust and confidence.
In practice, many disputes about restrictive covenants are resolved through negotiation rather than fully contested proceedings. The presence of reasonably framed covenants that appear enforceable can influence those discussions. Conversely, restraints that are plainly overbroad may weaken an employer’s negotiating position as well as their prospects in court.
Reviewing covenants in light of legal and policy changes (rapidly evolving area)
The legal and policy landscape around non-compete clauses and other restraints is under scrutiny in various jurisdictions, including the UK. Government-level consultations have considered, among other things, limiting the duration of non-compete clauses in employment contracts. While not all proposals have been implemented, and the details are subject to change, the underlying policy debate is relevant to assessing risk and planning ahead.
This makes periodic review of restrictive covenants and related practices important. Clauses that were considered acceptable some years ago may now sit less comfortably with current judicial and policy thinking, particularly where they are lengthy or particularly broad. Ensuring your covenants are kept under review, and taking advice where appropriate, can help keep your contracts aligned with both current legal tests and your commercial needs.
Given that employment law and policy, including in the area of post-termination restraints, can change relatively quickly, employers should avoid relying indefinitely on older templates or precedents without checking them against the up-to-date position.
How we can help (opinion and service information)
We advise employers across England and Wales on the design, updating, and enforcement of restrictive covenants for senior employees and other key staff.
We will respond to most enquiries with both an indicative scope of work and a fee estimate, as well as the offer of a complimentary 20-minute discovery video call to discuss your issues and how we can help, before sending a more considered formal fee estimate via email.
In some limited cases, if you would just like initial advice and guidance on a call, we may instead offer a fixed fee appointment (commonly charged between £280 and £500 + VAT) whereby we will review the information you provide, hold a video call consultation and then follow up with an advisory email (as well as a fee estimate for any further work identified)
Please email wewillhelp@jonathanlea.net or call us on 01444 708640 as a first step. We first need an overview of the background and your issues, together with any significant documents, to provide an indicative scope of work and fee estimate.
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This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited.