Employment Terms Defined: Restrictive Covenant

HomeBlogEmployment Terms Defined: Restrictive Covenant
March 10, 2022

A restrictive covenant is a provision in a contract by which one party agrees to give up certain rights and abide by specific restrictions. There are four basic types of restrictive covenants in employment contracts: 

  • Non-competition: A non-compete clause requires an employee to agree not to compete with the employer’s business after their employment has ended. Non-compete agreements are considered the broadest of restrictive covenants because they usually incorporate all the restrictions of other types of covenants. 
  • Non-solicitation: A non-solicitiation clause prohibits the employee from soliciting the employer’s prior, current or prospective clients for a set period of time.
  • Anti-raiding: An “anti-raiding” clause prohibits the employee from attempting to take the employer’s other workers to another job. Enticing, soliciting, or offering employment to current employees could be a violation of such an agreement. 
  • Confidentiality Agreements: This is one of the most common restrictive covenants. It prohibits employees from using the employer’s confidential information that is not available to the public. This information does not have to be a “trade secret” or protected by copyright – so long as it is not known to people outside the company, it can be protected by a confidentiality provision. 

How Can I Protect Myself From Unfair Restrictive Covenants?

The best way to protect yourself from unfair contract provisions is to get advice from your own employment lawyer before entering into a contract. A prospective employer might put pressure on you to sign a restrictive covenant. They might claim that you cannot be hired unless you sign it, that you do not have the time to let your own lawyer review the contract, or even try to tell you to consult with the company’s lawyers. (Remember, the company’s lawyers protect the company’s interest in the contract – not yours.) You have the right to get your own, independent legal advice from an employment lawyer of your choice before entering into any type of contract. 

What Should I Do If My Former Employer Is Trying To Use a Restrictive Covenant To Prevent Me From Working Somewhere Else?

It is unfortunately common for employers to use a restrictive covenant to bully former employees. They might claim that you are in breach of contract, that you have no rights under the contract, or that any employment anywhere is a breach of your restrictive covenants. These things aren’t necessarily true just because your former employer says so. You have the right to let your own lawyer review the contract to see if it the restrictive covenants are enforceable at all. 

Courts generally do not favor restrictive covenants that are overly broad (either in geographic scope or in duration). If a restrictive covenant makes it virtually impossible to accept work in your field from any other employer, a court may find it to be unenforceable altogether. Even if the contract is enforceable, some of the restrictive covenants might be stricken from the contract by the court. You need your own lawyer to advise you on your legal rights. Do not assume that you cannot engage in other work simply because your former employer complains about a restrictive covenant.

The Right Employment Attorneys For All Restrictive Covenant Issues

The experienced San Francisco employment lawyers at Olivier & Schreiber LLP have years of experience handling all types of restrictive covenants in employment contracts. Our San Francisco labor attorneys work hard to protect employees’ legal right to leave a job and accept employment elsewhere. Call (415) 484-0980 or visit our website to schedule your consultation today.




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