Restrictive Covenant

What is Restrictive Covenant?

A restrictive covenant is a clause in an employment contract that limits what an employee can do after leaving the organisation. Common types include non-compete clauses, which prevent former employees from working for competitors; non-solicitation clauses, which prohibit contacting former clients or colleagues; and non-dealing clauses, which restrict doing business with former clients. For a restrictive covenant to be enforceable, it generally must be reasonable in scope, duration, and geographic area, and must protect a legitimate business interest. Enforceability varies significantly by jurisdiction.