When an employee leaves a company, it is not uncommon for their employment contract to contain post-termination restrictive covenants. These clauses are designed to protect the interests of the company by limiting what the employee can do after their employment has ended.
There are several types of post-termination restrictive covenants that may be included in an employment contract. The most common are non-compete clauses, which prevent the employee from working for a competitor for a certain period of time. Non-solicitation clauses prevent the employee from soliciting the company`s customers or clients after they have left. Non-disclosure clauses prevent the employee from disclosing confidential information about the company to anyone outside the organization.
While these clauses may seem restrictive to the employee, they are important for protecting the company`s trade secrets, customer relationships, and intellectual property. Without them, employees could leave the company and take valuable information or contacts with them, potentially harming the company`s business.
However, it is important to note that post-termination restrictive covenants must be reasonable in scope and duration. Courts will not enforce clauses that are too broad or that prevent the employee from earning a living. For example, a non-compete clause that prevents the employee from working in their field for several years may be deemed unreasonable.
Employers also have a responsibility to ensure that employees understand the terms of their employment contract, including any post-termination restrictive covenants. It is best practice to discuss these clauses with employees before they sign the contract and to provide them with a copy of the agreement for their records.
Employees who are subject to post-termination restrictive covenants should be mindful of their obligations. They should avoid any actions that could violate the terms of their contract, such as contacting former clients or disclosing confidential information. If they are unsure of what is allowed under the terms of their agreement, they should seek legal advice.
In conclusion, post-termination restrictive covenants are an important tool for protecting a company`s interests after an employee leaves. However, it is essential that these clauses are reasonable and that employees understand the terms of their contract. By following these guidelines, both employers and employees can ensure a fair and mutually beneficial employment relationship.
