An Unrestricted Look At Restrictive Covenants

An Unrestricted Look At Restrictive Covenants

As mentioned above, there are consequences for breaking a restrictive covenant. But what exactly is the special obligation included in these contracts?

Basically, it’s a promise made by someone, but for our purposes, the agreement is often made between one employer and an employee.

For example, a non-compete clause can be an example of a restrictive covenant. In this case, let’s say that someone works for a particular major film studio. He or she signed a contract with the company and within that agreement lies an explicit promise that the individual will not move to a rival studio within six months of leaving his or her current job. This promise is considered a restrictive covenant.

A non-compete clause as a restrictive covenant can prove useful in maintaining secrecy around sensitive information employees could take to competitors should they find a new job.

There are a number of other restrictive covenants out there. For example, there are non-solicitation covenants, which prevent the pilfering of clients, customers or suppliers of the employer by a former employee. Additionally, there are non-dealing clauses, which prevent the former employee from engaging with his or her old clients, customers or suppliers.

Often times, these agreements are written in a narrow, concise manner to make them easily justifiable and difficult to challenge in court. When a restrictive clause is challenged, it will often require outside help. If you find yourself trying to put together your own restrictive covenant, or trying to navigate a particularly difficult one included in one of your signed contracts, don’t hesitate to contact an attorney for assistance.