RE: Ceo22 Oct 2021 13:30
Well let's hope Novacyt have a solid restrictive covenant in place in case GM does start to help out other companies. Let's hope they're not in the diagnostics filed.
The standard types of restrictions which can be used by employers are:
• non-competition covenants - restrictions on the former employee working in similar employment for a competitor;
• non-solicitation covenants – which prevent poaching of clients/customers/suppliers of the former employer;
• non-dealing covenants – which prevent a former employee from dealing with former clients/customers/suppliers, regardless of which party approached the other;
• non-poaching covenants – which prevent an employee poaching former colleagues.
For a restrictive covenant to be enforced it must not be drafted too widely. It will be for the employer, in the event of a clause being challenged, to show that the clause is justified and sufficiently narrow. To meet these criteria an employer must be mindful of certain factors:
• The breadth of the geographical area of any restriction and the length of time of the post termination restriction must be justified. It is unlikely that a wide geographical area will be justified and, as a general rule, a restriction for more than 6-12 months will be difficult to justify.
• The breadth of the activities that the employer is trying to restrict.
• The type of interest being protected, for instance, information such as trade secrets may be granted wider protection than customer information, given that its potential use across markets is wider.
An employer may also be required to evidence any connection between the employee and any information that is being protected.
The extent of clauses, therefore, must be relative to the employee's position within the business. As more senior employees will be in contact with more sensitive information, restrictions placed upon them may be justified as being more onerous. Overall, a one-size fits-all policy on restrictive covenant clauses risks the clause becoming unenforceable.
Restrictive covenants may also require periodic review in order to maintain their enforceability as the reasonableness of the covenant is judged at the time it was entered into.
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