Definition
Contractual clauses that limit an employee's activities after their employment ends, including non-compete, non-solicitation, non-dealing, and non-poaching obligations designed to protect the employer's legitimate business interests.
UK Context
UK courts take a strict approach to PTRs, with the burden on the employer to justify each restriction. The Government consulted in 2020 on limiting non-compete clauses to three months and requiring employers to pay compensation during the restriction period (as in some European jurisdictions) but has not yet legislated. The common law position remains that PTRs are void unless the employer can demonstrate they are reasonable and necessary.
Best Practices
- Draft restrictions that are tailored to the employee's role, seniority, and access to sensitive information
- Include cascading provisions so that if a broader restriction is unenforceable, a narrower one may still apply
- Review PTRs when employees are promoted or change roles to ensure they remain proportionate
- Use garden leave clauses alongside PTRs and consider whether garden leave periods offset restriction periods
- Take prompt legal advice and action if a breach is suspected, as delay can undermine enforcement
Frequently Asked Questions
Can post-termination restrictions be enforced if the employee is dismissed?
Generally yes, provided the restrictions are reasonable. However, if the employer has breached the contract by, for example, wrongfully dismissing the employee without notice, the employee may argue that the employer's breach released them from their post-termination obligations. This is known as the repudiatory breach doctrine.
Are post-termination restrictions enforceable against junior employees?
They are much harder to enforce against junior employees because the employer must demonstrate that the individual had sufficient access to confidential information, client relationships, or influence over staff to justify the restriction. Courts are unlikely to uphold broad restrictions for employees with limited seniority or client contact.
What is a cascading restriction?
A cascading restriction includes multiple versions of the same clause at different levels of scope. For example, a non-compete clause might restrict working for competitors for 12 months, or if that is unenforceable, for 9 months, or if that is unenforceable, for 6 months. This gives the employer the best chance of having at least the narrower restriction upheld.