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Protecting Your Business: Are Your Restrictive Covenants Likely to Stand Up in Court?

This article was published in the September/October 2025 edition of London Business Matters.

An employee leaves your employment. Within two weeks, they’re sitting at a competitor’s desk, calling your best clients, armed with your pricing strategy and inside knowledge of your company. You might think your ‘iron-clad’ contract will stop them. However, unless your restrictive covenants have been thought through carefully and well drafted, you could find they’re not worth the paper they’re printed on.

Clauses such as non-compete, non-solicitation and event confidentiality terms protecting specific information after employment ends, can be vital in protecting your client relationships, know-how, and commercial strategy.

Restrictive Covenants are generally considered anti-competitive, and the law aims to balance the right to protect your business with an employee’s right to earn a living; only clauses that go no further than are ‘necessary’ will be enforceable.

What will a court look at?

1. Legitimate business interests. The restriction must protect something genuinely valuable to your business, such as trade secrets, client connections, or workforce stability. Preventing competition for its own sake will not pass the test.
2. Reasonableness of scope. Restrictions must be proportionate in terms of duration and geography.
3. Tailored to the activity. Senior executives may warrant broader restrictions than junior staff. Generic ‘cut and paste’ clauses will often fail to persuade a court legitimate business interests that need protecting.

Common pitfalls

All too often, businesses rely on template documentation or blanket clauses that try to cover every eventuality. Overreach is dangerous; if even part of the covenant is too wide, the entire clause can be struck out.

Practical steps

• Be precise and define the information you are seeking to protect: name companies or the nature of a business which is competitive or territories which you wish to protect rather than using vague, sweeping terms.
• Audit at key stages: review restrictions when roles change or when broader access to business information is given.
• Consider garden leave: keeping a departing employee out of the market during their notice period can buy valuable time.
• Move fast: if you suspect a breach, prompt action is vital in demonstrating to a court the risks your business faces.

Properly drafted and well considered restrictive covenants are key in protecting business interests. Not giving them the time and respect they deserve will only see hard earned business advantages slip away to competitors.

To discuss the contents of this article, please contact Dipti Shah via the form below.

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Why U.S. Companies Need to be Prepared for UK Employment Law

Expanding into the UK: A Strategic Opportunity

As global markets continue to evolve, more U.S. businesses are looking to expand operations overseas; and the United Kingdom remains one of the most attractive destinations.

With a shared language, a highly skilled workforce and a strategic location deemed a gateway to Europe, the UK is an ideal launchpad for American companies seeking international growth. However, while the business environment may appear generally familiar, the legal and regulatory framework in the UK, particularly around employment law, can differ significantly from the U.S. system. For this reason, it is essential for any U.S. businesses entering the UK market to seek early guidance from experienced UK employment lawyers.

Key Differences in Employment Law

UK employment law places a strong emphasis on employee rights and protections. For instance, here in the UK, workers benefit from statutory entitlements including paid annual leave, statutory notice periods, redundancy pay, and protection against unfair dismissal. Many of these apply from day one of employment. Unlike the U.S. ‘at-will’ employment model, UK law places a key emphasis on employers following specific legal procedures when handling disciplinary action, grievances, redundancies, and dismissals. Therefore, failing to follow the various statutory processes can lead to legal claims, regardless of whether employers have just cause to discipline or terminate an employee’s employment.

Legal Reach Beyond Borders

Additionally, the reach of UK employment law can extend beyond borders. For example, sexual harassment protections apply even if the parties involved are located in different countries. A UK-based employee subjected to inappropriate behaviour from a colleague overseas could bring a claim under UK law. Employers can be held vicariously liable unless they have taken all reasonable steps to prevent such conduct, including providing training and enforcing clear policies.

Laying the Groundwork for Compliance

Early preparation is essential when establishing a UK presence. From the outset, U.S. businesses should ensure employment contracts (required from day one of employment), HR policies, and internal procedures complaint with UK law are in place. This proactive approach not only reduces legal risk but also sets the tone for a healthy workplace culture.

The Importance of Due Diligence in Acquisitions

Moreover, when entering the UK market through the acquisition of an existing business, it is critical to conduct a full employment law audit. Without proper due diligence, U.S. companies risk inheriting non-compliant practices, unresolved disputes, or hidden liabilities that could result in costly claims or operational disruption.

Legal Guidance: A Strategic Advantage

Involving UK employment lawyers at an early stage helps ensure a smooth, compliant entry into the UK market (whether this is through organic growth or acquisition) while protecting both the business and its workforce.

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Quastels Acts for Gerald Edelman on Their Acquisition of Vista Partners

Quastels LLP is delighted to have acted for Gerald Edelman on their acquisition of Vista Partners.

Founded in 1946, Gerald Edelman is a London-based accountancy and business advisory firm with over 20 partners, serving middle-market companies across the UK and internationally. The firm offers a comprehensive range of professional services, including accountancy, auditing, tax planning, corporate finance and strategic business advice. Vista Partners is a long-established accountancy and tax advisory firm based in Redhill. The firm provides a full range of services including accounting, audit, tax compliance, business advisory, and personal tax planning, primarily supporting owner-managed businesses and SMEs across Surrey, Sussex, and the South East.

Quastels LLP, led by corporate partner Adam Convisser, oversaw legal due diligence, transaction structuring and execution. Adam was supported by colleagues in the corporate, commercial real estate and employment teams showcasing our strong cross-departmental collaboration.

“We are thrilled to have completed the acquisition of Vista Partners. It was a pleasure to work with Adam and the Quastels team. Their advice was invaluable and they put in the extra hours to ensure we got the deal over the line, for which we are very grateful. We look forward to working with the team again in the future on other projects.”

– Nick Wallis

Congratulations to Gerald Edelman and the whole team at Vista Partners, we look forward to seeing your continued success.

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