Can restrictive covenants be enforced?

Can restrictive covenants be enforced?

If you decide to ignore a restrictive covenant, or are unaware that one applies to your land and breach it, it can be enforced against you. The most common remedies available to the enforcer of a breach of covenant are compensation or injunctions to prevent you from carrying out the action which is in breach.

Are termination agreements enforceable?

In general, severance agreements are legally valid and will be upheld by courts, as long as the agreement was entered into voluntarily and the terms are legal.

Can restrictive covenants be enforced after redundancy?

Yes, an employer is entitled to impose restrictive covenants on an employee who has been made redundant.

What is a post termination clause?

Restrictive covenants and non-compete clauses (sometimes known as post-termination restrictions) are clauses within a contract of employment or a Settlement Agreement which prevent a leaving employee from taking clients or key employees from their former employer, or working for a competitor.

Who enforces a restrictive covenant?

The owner of the land that benefits from the restrictive covenant is the one who can enforce a breach in restrictive covenant, as they potentially stand to lose out as a result of the breach. If they choose to, they are the party that can take legal action against you.

How long are restrictive covenants enforceable?

This seeks to prevent you from working for a competitor for a set period of time after termination of your employment. This is usually 6 months, but can sometimes be 3 or even 12 months depending on your seniority.

What is an enforceable termination clause?

A termination clause is a passage of an employment contract that defines an employee’s rights to notice, severance or termination pay in lieu of notice. Sometimes it is called a severance clause in an employment contract.

Can a non compete clause be enforced after employment termination?

Under Section 27 of the Contract Act, any restrictions laid down in Agreement which shall be applicable after termination of contract shall tantamount to illegal and anything illegal can not be enforced by the Court’s order.

Is a non-compete enforceable if you are fired?

Even though a non-compete agreement can still be enforced when you are fired, you could potentially get out of it if the employer breaches your contract. You can also get out of the agreement if the employer fired you for a reason that is not just or fair.

Is a 24 month restrictive covenant enforceable?

As a rule of thumb, 3-6 months would probably be enforceable; 6-12 months may be enforceable; 12-24 months are only likely to be enforceable against very senior employees and restrictions lasting longer than 24 months are unlikely to be enforceable.

How long can covenants be enforced?

If the covenant is attached to the land it is said to ‘run with the land’. That means it continues to apply to the land regardless of whether either the burdened or neighbouring lands have been sold on. This means a restrictive covenant can last indefinitely even if its purpose now seems obsolete.

How do you know if a restrictive covenant is valid or enforceable?

When are covenants valid and enforceable?

1. The covenant must be for the benefit of the covenantee’s land.
2. The covenant was intended to run with the land.
3. The party seeking to enforce the covenant must own the benefiting land.
4. The benefit of the covenant has passed to the person seeking to enforce it.

How are post termination restrictions enforceable in employment contracts?

Post termination restrictions are often found in employment contracts to seek to protect the employer if and when that employee leaves. A well known type is a non-compete clause. An employee may have an extensive awareness of confidential information, business tactics and desirable clients.

Is the post termination non-compete clause enforceable?

Post-termination non-compete clauses or agreements are not enforceable. However, such provisions are typically included in employment agreements because they can have a deterrent effect or create a sense of moral obligation on the part of an employee.

How long does a post termination restraint period last?

The law does not specifically regulate restrictive covenants. However, most restrictive periods range between 2 and 5 years. Under certain circumstances, the court has enforced a 10-year post-termination restraint period, based on the business and the amount of consideration paid to the employee.

Do you have to accept post termination covenants?

You are entitled to tell your employer that you do not accept the covenants and ask them to either amend or remove the covenants altogether. However, post-termination covenants are a common feature of many contracts and, ultimately, your employer might not be prepared to alter them and your job offer could even be withdrawn