Restrictive Covenants: Can Your Employer Stop You Working for a Competitor?

Whether your employer can prevent you from joining a competitor depends on your contract, the type of restrictive covenant, and whether the restriction is reasonable and protects a legitimate business interest. Some covenants are unenforceable — but many are upheld when drafted properly.

What Are Restrictive Covenants?

Restrictive covenants are clauses in employment contracts designed to protect an employer’s business after an employee leaves. They typically restrict:

• Working for a competitor
• Soliciting clients
• Poaching staff
• Using confidential information

There is a lot of mythology around these clauses, including the idea that they are “not worth the paper they’re written on.” Sometimes that’s true, but often it isn’t.

When Are Restrictive Covenants Enforceable?

Courts assess enforceability based on reasonableness. The test is simple: Would an ordinary person consider the restriction reasonable?

To be enforceable, a covenant must:

• Protect a legitimate business interest (e.g., trade secrets, client relationships, confidential information)
• Be reasonable in duration (often 3–12 months)
• Be reasonable in geographical scope
• Be proportionate to the employee’s role

Examples

• A shoe‑shop sales assistant cannot realistically be stopped from working in another shoe shop nearby.
• A senior buyer, specialist consultant or high‑tech engineer may legitimately be restricted from joining a competitor for a limited period.
  

If There Is No Restrictive Covenant in Your Contract

Then your employer cannot stop you working for a competitor. They may still rely on confidentiality obligations, but they cannot impose new restrictions after you leave.

If There Is a Restrictive Covenant in Your Contract

The covenant will be judged on:

• Reasonableness
• Scope
• Duration
• Whether your employer has a legitimate interest to protect

These clauses are especially common and often enforceable in industries such as recruitment, tech, finance, and professional services.

What Happens If You Breach a Restrictive Covenant?

If you breach the clause, your employer may:

• Seek an injunction to stop you working for the competitor
• Claim damages for financial loss
• Take legal action against your new employer if they encouraged the breach

However, enforcement is not automatic. Employers take a risk too:

• If they sue and lose, they may have to pay your legal costs
• If they win, you may have to pay theirs

Because of this, restrictive covenants are not always enforced, but they absolutely can be, especially for senior or specialist roles.

Should You Tell Your New Employer About the Covenant?

Yes. Always.

Your new employer will want to know:

• Whether hiring you creates legal risk
• Whether they need to obtain legal advice
• Whether they need to adjust your role temporarily

Most reputable employers will arrange legal advice for you before you start.

Key Takeaways

• Restrictive covenants can be enforceable if they are reasonable and protect a legitimate interest.
• Junior employees are less likely to be restricted; senior or specialist employees are more likely to be.
• Breaching a covenant can lead to legal action, injunctions and damages.
• Always tell your new employer about any restrictions.
• Get legal advice before taking action, these clauses can be complex.