Restrictive covenants & team moves

Employers wishing to protect their confidential information and their relationships with clients, suppliers and employees frequently rely upon restrictive covenants, often referred to as post-termination restrictions (PTRs).

These are provisions which seek to restrict what individuals can do when after they leave their employer.

Restrictive covenants will only be enforced by the English courts if they are no wider than is necessary to protect the employer’s legitimate business interests. Careful drafting is essential but difficult as the legal position evolves when new cases are heard in the appellate courts. It is common for businesses not to focus on restrictive covenants sufficiently until they have a dispute.

Team moves are when two or more individuals seek to leave their employer and join a new one at the same time. They can be hugely damaging to a business.

We advise employers, senior executives and teams on restrictive covenants, including related disputes and team moves. We understand that no two cases are the same and that practices and norms vary from sector to sector and even within different parts of a sector such as financial services. We also understand the impact these disputes can have on a business.

Restrictive covenant disputes can be very costly. Taking advice at the earliest juncture is recommended and can save costs later on.

Restrictive covenants & team moves experience

• Advised a recruiter for the fashion world in respect of the alleged poaching of staff from a competitor.

• Acted for Vestra Wealth LLP against UBS Wealth Management in one of the largest team moves seen in the City of London and in respect of which UBS issued an application for injunctive relief to prevent the move from happening. The principles derived from the case are now routinely used both by parties wishing to orchestrate a team move and parties wishing to prevent them

• Represented the Brandeaux Group (Brandeaux Advisers (UK) Ltd & Others v Chadwick [2010]) in which our client recovered confidential information retained by a former senior employee / director, and established legal precedent on whether there are any circumstances in which a former employee is entitled to retain his employer’s confidential information.

• Acted for an individual defendant (Foxtons Limited v James Clarke) in proceedings issued by the British estage agency for alleged breaches of restrictive covenants.