Post-Termination Restrictions in UK Contracts: What It Means & Example Wording

When to Include a Post-Termination Restrictions

• In employment contracts for senior employees, directors, client-facing staff, and anyone with access to trade secrets or key relationships
• In partnership agreements and LLP member agreements where departing partners could take clients or team members
• In business sale agreements where the seller could set up in competition immediately after selling

Example Wording

This example wording is illustrative only. Customise it to your specific circumstances and consider seeking legal advice.

Is a Post-Termination Restrictions Enforceable in the UK?

PTRs are subject to the restraint of trade doctrine and must protect a legitimate business interest and be no wider than reasonably necessary. UK courts assess each restriction individually. Cascading restrictions (shorter non-compete, longer non-solicitation, even longer non-dealing) are good practice because if the non-compete is struck down, the narrower restrictions may survive. Courts will consider: the employee's seniority and access to sensitive information, the duration and geographical scope, the width of the restricted activities, whether garden leave was served (which may reduce the enforceable period), and any consideration provided for the restrictions.

Common Mistakes

• Using identical PTR durations for all restrictions — cascading periods (e.g., 6 months non-compete, 9 months non-solicitation, 12 months non-dealing) are more likely to be upheld than a blanket 12-month restriction on everything
• Not defining 'Restricted Client', 'Restricted Employee', 'Competing Business', and 'Restricted Area' precisely — vague definitions are a common reason for PTRs being struck down
• Failing to account for garden leave when setting PTR durations — courts may credit the garden leave period against the post-termination restriction period, effectively shortening the enforced restriction