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Restrictive Covenants, Scotland

“Restrictive covenant” is not a term you are likely to come across every day. It is more likely that you will have heard the term “non-compete clause”.

Broadly speaking, restrictive covenants are terms in contracts which restrict a person’s future employment in a particular way after they leave their role with their current employer.

It may restrict them from working with competitors in the same field or restrict working with certain clients and customers.

Restrictive covenants in contracts made in Scotland are enforceable if they intend to protect a legitimate business interest and are not unreasonably limiting.

If you are an employer, the specialist restrictive covenant solicitors at Jones Whyte can help you draft effective restrictive covenants to include in your contract of employment.

If you are an employee and you want to know how to challenge a restrictive covenant, or seeking advice on a term in a prospective contract of employment, contact Jones Whyte today. We will be able to advise you if the covenant is unfair and if there are grounds to challenge it.

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Types of restrictive covenants

While the best known type of restrictive covenant is the non-compete clause, restrictive covenants can be broader than this.

The main types of restrictive covenants are:

Non-competition covenants. These prevent former employees from working for competitors for a set period of time.
Non-dealing covenants. These prevent former employees from working with certain clients or customers for a period of time.
Non-solicitation covenants. These stop former employees from approaching certain clients and persuading them to move their business.
Non-poaching covenants. These prevent former employees from approaching former colleagues and attempting to switch roles.

If you are an employer and you are seeking to protect your business when employees leave, by including a restrictive covenant in your contract of employment, then contact the dedicated restrictive covenant lawyers at Jones Whyte today.

We can help you carefully draft the clause to ensure it is enforceable.

Ensuring restrictive covenants are fair

To be enforceable, restrictive covenants must not go beyond what is reasonably necessary to protect a business interest.

For instance, a restrictive covenant can restrict an employee or a competitor business from working in a particular location. However, it is important to consult a specialist restrictive covenants solicitor to ensure that the area proposed isn’t unduly wide.

When considering how long to make the restrictive covenant last, there really is no standard amount of time. It depends on the complexity of the business, the seniority of the employee and the sensitivity of the business to the competition.

The best thing you can do is contact the experienced restrictive covenant lawyers at Jones Whyte. We can advise you as to the best way to approach the clause.

Other support from Jones Whyte

Restrictive covenant solicitors are part of the disputes team at Jones Whyte. That means we can offer you all the support you need, while any disputes are resolved.

Issues we have dealt with include:

Whatever type of dispute you are going through, contact Jones Whyte and we will work to resolve it.

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Deborah Carmichael Partner & Solicitor Advocate

Matthew Currie Associate

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