Restrictive Covenants and Employment Contracts

Restrictive covenants in employment contracts are becoming increasingly common in the modern workplace. These covenants are clauses inserted into employment contracts that restrict an individual`s activities after they have left the company.

For example, an employee may be prohibited from working for a competitor for a certain period of time after leaving their current job. This is typically known as a non-compete clause. Alternatively, an employee may be required to keep their former employer`s confidential information confidential for a certain period of time after leaving the company. This is known as a non-disclosure clause.

While these covenants are designed to protect companies, they can also be restrictive for employees. This is because they may limit an individual`s ability to find new employment or pursue their careers in certain industries.

The enforceability of restrictive covenants varies from state to state, and there are many considerations that must be taken into account when drafting these clauses. For example, courts will typically look at the reasonableness of the restriction and the level of harm that could be caused to the company if the covenant is breached. Additionally, courts will often take into account the employee`s unique circumstances, such as their level of expertise and whether they have access to confidential information.

Employers should also be aware of the impact that these covenants can have on their workplace culture. Restrictive covenants can create an atmosphere of mistrust and anxiety, and may discourage employees from leaving the company even if they are unhappy with their current position.

Overall, while restrictive covenants can be an effective tool for companies, it is important that they are used judiciously and with an understanding of their potential impact on employees and the workplace culture. Employers should work with experienced attorneys to ensure that their covenants are enforceable and reasonable, and that they are not overly restrictive for their employees.