Q&A - I am being made redundant can client confidentiality clause in my employment contract still be enforced?

23/02/2015

Q: I have just been told I am being made redundant. My contract of employment contains restrictive covenants regarding client confidentiality and what work I may or may not do with another company if I leave. Can these covenants still be enforced if I have been left with no choice but to leave my job because the work is being denied me through redundancy? If they can be enforced, is there any way of getting them removed?

A: As a rule of thumb a restrictive covenant will only be enforceable if it specifically protects the employer’s legitimate business interests, and only applies for a reasonable time period. In practice this usually means that you cannot approach any of your employer's clients or contacts for business but a lot depends on your role and status.

Separately at common law you must not disclose confidential information or use your knowledge of your employer’s products or practices to damage their business. Your employer cannot, however, restrict your ability to work at all.

As soon as you receive the terms of the redundancy package you should seek proper legal advice from a solicitor who has experience in employment matters - because whilst restrictive covenants are sometimes unenforceable, being sued is a costly way of finding out. Most employers will expect you to try and negotiate better terms for your redundancy and it may be that your employer is more concerned about protecting his trade secrets than stopping you competing so there could be room for negotiation.

When it comes to getting released from covenants, a solicitor is likely to achieve a better result than you can. Similarly, a solicitor may be able to achieve a better package offer. Whatever happens though, you should keep a record – off the company premises - of all discussions that takes place.