• At Kemp Little, we are known for our ability to serve the very particular needs of a large but diverse technology client base. Our hands-on industry know-how makes us a good fit with many of the world's biggest technology and digital media businesses, yet means we are equally relevant to companies with a technology bias, in sectors such as professional services, financial services, retail, travel and healthcare.
  • Kemp Little specialises in the technology and digital media sectors and provides a range of legal services that are crucial to fast-moving, innovative businesses.Our blend of sector awareness, technical excellence and responsiveness, means we are regularly ranked as a leading firm by directories such as Legal 500, Chambers and PLC Which Lawyer. Our practice areas cover a wide range of legal issues and advice.
  • Our Commercial Technology team has established itself as one of the strongest in the UK. We are ranked in Legal 500, Chambers & Partners and PLC Which Lawyer, with four of our partners recommended.
  • Our team provides practical and commercial advice founded on years of experience and technical know-how to technology and digital media companies that need to be alert to the rules and regulations of competition law.
  • Our Corporate Practice has a reputation for delivering sound legal advice, backed up with extensive industry experience and credentials, to get the best results from technology and digital media transactions.
  • In the fast-changing world of employment law our clients need practical, commercial and cost-effective advice. They get this from our team of employment law professionals.
  • Our team of leading IP advisors deliver cost-effective, strategic and commercial advice to ensure that your IP assets are protected and leveraged to add real value to your business.
  • Our litigation practice advises on all aspects of dispute resolution, with a particular focus on ownership, exploitation and infringement of intellectual property rights and commercial disputes in the technology sector.
  • We have an industry-leading reputation for our outsourcing expertise. Our professionals deliver credible legal advice to providers and acquirers of IT and business process outsourcing (BPO) services.
  • We work alongside companies, many with disruptive technologies, that seek funding, as well as with the venture capital firms, institutional investors and corporate ventures that want to invest in exciting business opportunities.
  • Our regulatory specialists work alongside Kemp Little’s corporate and commercial professionals to help meet their compliance obligations.
  • With a service that is commercial and responsive to our clients’ needs, you will find our tax advice easy to understand, cost-effective and geared towards maximising your tax benefits.
  • At Kemp Little, we advise clients in diverse sectors where technology is fundamental to the ongoing success of their businesses.They include companies that provide technology as a service and businesses where the use of technology is key to their business model, enabling them to bring their product or service to market.
  • We bring our commercial understanding of digital business models, our legal expertise and our reputation for delivering high quality, cost-effective services to this dynamic sector.
  • Acting for market leaders and market changers within the media industry, we combine in-depth knowledge of the structural technology that underpins content delivery and the impact of digitisation on the rights of producers and consumers.
  • We understand the risks facing this sector and work with our clients to conquer those challenges. Testimony to our success is the continued growth in our team of professionals and the clients we serve.
  • We advise at the forefront of the technological intersection between life sciences and healthcare. We advise leading technology and data analytics providers, healthcare institutions as well as manufacturers of medical devices, pharmaceuticals and biotechnological products.
  • For clients operating in the online sector, our teams are structured to meet their commercial, financing, M&A, competition and regulatory, employment and intellectual property legal needs.
  • Our focus on technology makes us especially well positioned to give advice on the legal aspects of digital marketing. We advise on high-profile, multi-channel, cross-border cases and on highly complex campaigns.
  • The mobile and telecoms sector is fast changing and hugely dependent on technology advances. We help mobile and wireless and fixed telecoms clients to tackle the legal challenges that this evolving sector presents.
  • Whether ERP, Linux or Windows; software or infrastructure as a service in the cloud, in a virtualised environment, or as a mobile or service-oriented architecture, we have the experience to resolve legal issues across the spectrum of commercial computer platforms.
  • Our clients trust us to apply our solutions and know-how to help them make the best use of technology in structuring deals, mitigating key risks to their businesses and in achieving their commercial objectives.
  • We have extensive experience of advising customers and suppliers in the retail sector on technology development, licensing and supply projects, and in advising on all aspects of procurement and online operations.
  • Our legal professionals work alongside social media providers and users in relation to the commercial, privacy, data, advertising, intellectual property, employment and corporate issues that arise in this dynamic sector.
  • Our years of working alongside diverse software clients have given us an in-depth understanding of the dynamics of the software marketplace, market practice and alternative negotiating strategies.
  • Working with direct providers of travel services, including aggregators, facilitators and suppliers of transport and technology, our team has developed a unique specialist knowledge of the sector
  • Your life as an entrepreneur is full of daily challenges as you seek to grow your business. One of the key strengths of our firm is that we understand these challenges.
  • Kemp Little is trusted by some of the world’s leading luxury brands and some of the most innovative e-commerce retailers changing the face of the industry.
  • HR Bytes is an exclusive, comprehensive, online service that will provide you with a wide range of practical, insightful and current employment law information. HR Bytes members get priority booking for events, key insight and a range of employment materials for free.
  • FlightDeck is our portal designed especially with start-up and emerging technology businesses in mind to help you get your business up and running in the right way. We provide a free pack of all the things no-one tells you and things they don’t give away to get you started.

Restrictive Covenants - should you bother and are your restrictive covenants fit for purpose?

As we make tentative steps out of the recession, there is greater movement in the labour market and it is becoming increasingly important for businesses to ensure that their trade connections, trade secrets and other confidential information are adequately protected.  Ensuring that (i) relevant employees are subject to appropriate restrictive covenants; and (ii) restrictive covenants are used effectively are two ways in which to protect these valuable assets.

This article looks at the value in having restrictive covenants and looks at some considerations which come into play when introducing restrictive covenants.

Is it worth having restrictive covenants?

Employers often question whether it is worth bothering with restrictive covenants - even if you have gone to the effort of drafting reasonable restrictive covenants which are appropriate for the individual concerned, in practice they are often just too difficult and expensive to enforce.

Restrictive covenants are generally enforced through an injunction.  It is true that an application for an injunction can be very expensive given the speed of the application and the level of evidence required. In many instances the potential for damage to the business is far outweighed by the expense.  However, in practice restrictive covenants have a lot more going for them than just providing a route to an injunction.

Restrictive covenants encourage good behaviour from former employees.  The mere presence of a restrictive covenant may make former employees think twice about going to work for a competitor, solicit clients etc.  In addition, it may deter potential employers from hiring the individual or they may well take precautions to ensure the individual is not working in a way which breaches the restrictive covenants and it may mean there is a delay in the employee commencing work for them in a meaningful way.

The threat of an injunction can be quite powerful and the possibility that the employer could seek such a remedy is a good deterrent.  If an employer suspects an employee is acting in breach of his covenants and threatens an injunction this can cause considerable inconvenience for the employee and the new employer in having to respond to such threat and taking legal advice on the matter. A breach of a restrictive covenant is essentially a breach of contract, so the new employer may be particularly concerned about being liable for inducing the employee to breach their contract with a former employer.

Being able to threaten to seek an injunction may be enough to illicit undertakings (either to the court or just in written correspondence between the parties) from former employees and new employers in relation to certain actions they will and will not do, which can provide the required protection whilst enabling the parties to avoid an expensive injunction application.

Introducing or reviewing restrictive covenants

The basics

The basic principle is that restrictive covenants which seek to restrict an employee’s activities following termination of employment are void as a restraint of trade unless it can be shown that:

  • the employer has a legitimate proprietary interest which is appropriate to protect; and
  • the restriction goes no further than reasonably necessary in order to protect that interest, having regard to the interests of the parties and public interest.

In principle employers can seek to protect the following as legitimate proprietary interests:

  • trade secrets and other confidential information;
  • trade connections, suppliers, clients;
  • skills of workforce.

What does this mean in practice for tech businesses?

When thinking about introducing restrictive covenants or reviewing current ones, the starting point is to consider what proprietary interest you are looking to protect.  Having a clear idea of this will make the rest of the analysis easier in terms of deciding (i) what type of restriction would be appropriate; and (ii) the scope of the restriction to try to ensure it goes “no further than reasonably necessary”.

General considerations

The interest you are trying to protect may be different for different functions and seniorities of employee, for instance a CFO may not have any relationships with clients or customers therefore a restriction on soliciting clients may not be appropriate for that individual.  However, the CFO is likely to have access to highly confidential information about the business generally and so a non-compete may be appropriate.

In determining the length of the restrictions, if you are aiming to protect confidential information you should consider how long such information will be ‘current’ for.   Where you are seeking to protect relationships with customers or suppliers you should consider how long it would take a new recruit to build up the same sort of relationship with customers and suppliers.

We have set out below some specific issues which should be considered in relation to different forms of restrictions.


Courts will not generally enforce a restriction which is simply to prevent competition.  However, sometimes a restriction on competition is the only way of protecting confidential information.  As this is the most onerous form of restriction this ought to be the most carefully drafted.

One main issue is how to define the business with which the employee cannot compete.  Restrictions are often entered into when an individual first joins a company but you will only come to rely on them a number of years down the line when the business may look very different to when they were entered into. Given the rapid growth of tech businesses, an employee’s role can often change significantly too, therefore covenants should be reviewed regularly and careful drafting is needed to prevent the definition of ‘business’ going quickly out of date. 

For internet businesses and other tech companies with a global presence, where the employee could be based anywhere in the world, employers should consider which territories it conducts business in respect of as well as where their employees and customers/clients are located.

An added complexity is whether a business seeks to protect confidential information in relation to prospective business; this may be where an employee has been heavily involved in developing a new product which is yet to come to market or in plans to extend business to new geographical areas.

A careful balance needs to be struck when drafting in respect of geographical scope and prospective business as making restrictions too broad could render them completely unenforceable.  

Non-solicitation of / non-deal with clients

When looking to protect relationships with clients or customers, restrictions on solicitation and dealing with clients are often used.

When determining the scope of such restrictions you need to consider to which clients it will extend.  In a small business it may be that one employee has contact with and influence over all clients of the business, so such a wide restriction may be appropriate.  However, this may not be appropriate where the employee has dealings with only a limited number of clients of the business.  Again, with growing businesses this may be something which changes fairly quickly, therefore careful drafting is needed to avoid the definition becoming too broad in a changing business.

An employee may have been developing relationships with potential clients prior to his termination. You should consider whether relationships with potential clients should also be protected, although this is potentially extremely broad therefore drafting with care is needed here in order to strike a balance between the need for protection of the employer and casting the net too widely.

Non-solicitation of / non-employ employees

The interest in maintaining a stable, trained workforce is something that can in principle be protected.  Whilst one person leaving may be something a business can deal with, a number of individuals leaving in quick succession may be problematic in terms of leaving a gap in skills and knowledge.   Restrictions on soliciting and employing/ engaging employees and other personnel of the business are often used to seek to protect this interest.  Such restrictions may also be used to protect confidential information and customer connections too.

With these restrictions, you need to consider which employees they would apply to and this is likely to depend on the purpose of the restriction.  Applying this to all employees may be too broad to be enforceable as poaching very junior employees is unlikely to be damaging to the business’ legitimate interests.  Where the concern is protecting confidential information, you would look at including employees who are privy to material confidential information.  Where the concern is stability of the workforce, you would look at including employees who have influence over other employees and/ or whose departure would otherwise be a significant detriment to the business.

Other restrictions

It may be that actually the relationships you are more concerned with protecting are those with your suppliers rather than your customers or clients. For instance the priority for an online TV or film streaming service may be to seek to protect the relationships with the companies who provide that content rather than relationships with customers; there may be no relationship between individual customers and employees to protect if there are thousands of customers who buy the products or services through a website.  Such businesses should therefore think about restrictions designed to protect these interests.


In our view, restrictive covenants are worth having, even if you do not plan on seeking an injunction to enforce them.  Getting the right balance in the covenants can be more complex for tech businesses than for more traditional businesses so careful drafting is needed.

If you are thinking about introducing restrictive covenants, you’re concerned your current restrictions are not fit for purpose or if you would like advice on how to use your restrictive covenants to best effect - feel free to contact a member of our Employment Team who would be delighted to help you.

For further information, please contact Amy Douthwaite - Employment associate