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Restrictive covenants in employment contracts

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

A High Court case provides another reminder of the high hurdle that employees must overcome to demonstrate a repudiatory breach of contract. The court upheld a 12 month non-solicitation restrictive covenant in a senior insurance broker’s contract, and awarded damages and an injunction to his former employer for the remaining period of the covenant.

The court found that the employer had made a genuine attempt at consultation, but that this had been frustrated when the broker refused to engage in the process. Overall, the employer’s conduct was not consistent with a repudiation of the contract.

This checklist explains what restrictive covenants are, when they are likely to be enforceable and how they can be used in employment contracts to protect a business’s interests.

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