Employment Contract Template with Restrictive Covenants (UK 2026)

Employment ContractRestrictive Covenants

Last updated: February 2025

When You Need This Contract

A comprehensive restrictive covenants package typically includes multiple layers of post-termination protection: non-competition, non-solicitation of clients, non-dealing with clients, non-solicitation of employees, and confidentiality obligations. Each restriction protects a different legitimate business interest and has different enforceability thresholds. The package should be tailored to the individual employee's role and access, with more senior employees having broader restrictions and junior employees having more limited ones.

Key Clauses

  • Non-compete clause with defined scope and duration
  • Non-solicitation of clients worked with in the final 12 months
  • Non-dealing with clients regardless of who initiates contact
  • Non-solicitation of employees and key team members
  • Cascading duration structure with each restriction at an appropriate length

What to Watch Out For

  • Using the same restrictive covenant package for all employees regardless of seniority, undermining enforceability by making restrictions disproportionate for junior roles
  • Not distinguishing between non-solicitation and non-dealing, and relying solely on non-solicitation which only prevents the employee from initiating contact

Sample Clauses

  • Sample non-solicitation clause: 'For [12] months following termination, you shall not solicit or endeavour to solicit the business or custom of any Restricted Customer. A Restricted Customer means any person or entity who was a customer of the Company and with whom you had material dealings during the [12] months preceding termination.'
  • Sample non-dealing clause: 'For [6] months following termination, you shall not deal with any Restricted Customer, whether or not the dealing was solicited by you. This restriction applies regardless of who initiates the contact or the business opportunity.'

FAQ

What is the difference between non-solicitation and non-dealing?

Non-solicitation prevents the departing employee from actively approaching or inviting business from restricted clients. The employee is still free to accept business if the client approaches them. Non-dealing is broader and prevents any business dealings with restricted clients regardless of who initiates contact. Non-dealing provides stronger protection but may be harder to enforce for longer periods because of its wider scope.

Should restrictive covenants have different durations for different restrictions?

Yes. A cascading structure is best practice: non-compete for 6 months as the broadest restriction, non-dealing for 6 months, non-solicitation of clients for 12 months, and non-solicitation of employees for 12 months. Each restriction protects a different interest, and the duration should reflect the level of restraint imposed. This layered approach maximises the chance of each individual restriction being upheld.

Related Templates

Employment Contract Template with Non-Compete Clause (UK 2026)

Employment Contract Template with Garden Leave Clause (UK 2026)

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This is guidance for UK businesses, not legal advice. Templates are illustrative. Consult a solicitor for complex matters.

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