This guide is for employees looking at the restrictions in their own contract, either before signing or because they’re thinking about leaving. If you’re an employer drafting covenants, our guide to what employers can and can’t enforce covers that side.
A covenant isn’t automatically binding because you signed it, and it isn’t automatically void either. It depends on your role, what you had access to and how the clause is worded.
What restrictive covenants are
A restrictive covenant is a term that limits what you can do after your employment ends. Most contracts use some combination of these:
- Non-compete: you can’t work for a competitor, or set up a competing business, for a set period.
- Non-solicitation of clients: you can’t approach the employer’s clients to win their business.
- Non-dealing: you can’t do business with those clients at all, even if they approach you.
- Non-poaching of staff: you can’t recruit or encourage colleagues to leave with you.
Separately, you’ll usually have a confidentiality clause, which has no time limit and doesn’t stop you working anywhere. It stops you using or disclosing the employer’s confidential information.
The test a court applies
Post-employment restrictions are restraints of trade, and English law treats them as unenforceable unless the employer shows two things. First, that the clause protects a legitimate business interest: trade secrets and confidential information, client and supplier connections, or the stability of its workforce. Stopping ordinary competition, or stopping you using your general skills, doesn’t count.
Second, that the restriction goes no further than reasonably necessary, looking at its length, area and the activities it covers. This is judged as at the date the covenant was agreed. So a clause that was too wide for the junior role you signed it in isn’t saved by a later promotion, and a clause that was reasonable when you signed doesn’t fail just because your role shrank.
If one part of a covenant is unreasonable, a court can sometimes cut out the offending words and enforce what’s left, but it won’t rewrite the clause into something reasonable. Well-drafted contracts split restrictions into separate parts for this reason.
Non-compete clauses
These are the hardest for an employer to justify, because they stop you working rather than just protecting particular relationships. A court will usually want to see that a non-solicit or non-dealing clause wouldn’t have been enough on its own, typically because you had confidential information that would be useful to a competitor and hard to police any other way.
There’s no fixed maximum. Three to six months is common and more often upheld; 12 months is sometimes enforced for senior people with strategic information. Say your contract bars you from “any business in the financial services sector” anywhere in the UK for 12 months, and you were a mid-level adviser with a book of local clients. That is likely to be wider than necessary. A six-month bar on joining a direct competitor in the same region is a different proposition.
As of now, there’s no statutory cap on non-compete clauses in England and Wales. The government published a working paper on reforming them in late 2025, but nothing has been legislated, so the common law test above still applies.
Non-solicitation and non-dealing clauses
These are easier to enforce because you can still work in your field. What makes them reasonable is usually the definition of the clients covered. A clause limited to clients you personally dealt with, or had material involvement with, in the last 12 months or so before you left is the usual form. A clause covering every client the company has ever had, including ones you never heard of, is likely to be too wide.
Non-dealing is stricter than non-solicitation: if a client rings you unprompted after you leave, a non-solicit may not stop you taking the work, but a non-dealing clause will. Periods of six to 12 months are common for both. The same logic applies to staff non-poaching clauses: limiting them to colleagues you worked with, at or above a certain level, makes them more defensible.
Things that can change the position
If the employer seriously breaches your contract, for example by dismissing you without the notice it owes, it may lose the right to rely on the covenants. Covenants introduced part-way through employment generally need something given in return, such as a pay rise or promotion tied to accepting them. And a long spell of garden leave may count against the need for a further restriction. None of these is guaranteed to help; they depend on the facts and the drafting.
Red flags to look for
- A definition of “competitor” or “restricted business” wide enough to cover your whole sector.
- Client restrictions that aren’t limited to clients you dealt with, or that look back over several years.
- No geographic limit on a non-compete, or a worldwide one when your work was local.
- Periods that look long for your level, particularly a non-compete of more than six months for a non-senior role.
- No offset for time spent on garden leave.
What to do
Before you sign, ask. Covenants are one of the more negotiable parts of an employment contract, and a specific counter-proposal works better than a general objection: “I’m happy not to deal with clients I’ve worked with for six months, but I can’t agree to a 12-month ban on working anywhere in the sector.” Ask for any garden leave to be deducted from the covenant periods.
If you’re planning to leave, don’t assume a clause is unenforceable and hope. An employer can apply for an injunction quickly, and defending one is expensive. Take advice on your clause before you resign or approach anyone, and don’t take client lists or documents with you, whatever the covenants say.
Our employment contract review looks at the covenants in your contract, explains how wide they are in plain English and suggests what you might ask to change. It doesn’t replace legal advice if you’re in a live dispute, but it’s a quick way to see where you stand before you sign.
Related: what the employment contract review covers, and a complete sample report.