Why employers use restrictive covenants
Employers use restrictive covenants as a way of protecting their interests when employees leave. In a competitive market, where there is an ever greater reliance on data and confidentiality, it is understandable that companies are keen to avoid leaking sensitive information.
When restrictive covenants go too far
In certain cases, however, the terms of the covenant can be excessive and this can stand in the way of an employee’s career progression. Restrictions can be so generalized and far-reaching that they effectively bar departing staff from working within the industry for a prolonged period of time.
Relevance to the HVAC sector
The issue is of particular concern in the HVAC sector where the nature of the role means that sales engineers have in-depth technical knowledge of products, upcoming innovations and current projects. This knowledge is essential to their job and without it they would be unable to negotiate contracts and win deals.
When opportunities come up with other manufacturers they will be taking that knowledge with them. They may also be dealing with the same contractors as they did before.
The difficulty of imposing a restrictive covenant that prevents an employee from working for a competitor for a long time, say 12 months, is that it puts that sales engineer out of the market and out of touch with technical developments to an extent that could impact on their knowledge and skills.
Why excessive restrictive covenants won’t stand up in court
If any clause within a covenant is deemed to be unreasonable or excessive, a tribunal or court can rule it invalid. Employers have a much better chance of winning their case if the restrictive covenant is specific in its objectives. The terms should be just strict enough to give the essential protection that the company feels is justified to protect its interests.
Why blanket restrictions are bad for business
Many restrictive covenants go way beyond the minimum needed to offer the company protection. Not only does this make it difficult for an employee to take up an opportunity being offered by another company, it also results in bad feeling. An employee who has had a bad experience with an employer through having to fight an excessive restrictive covenant is unlikely to speak well of that manufacturer in the future.
Savvy HVAC Careers Advice from Thornhvac
Thornhvac is a leading HVAC recruitment company serving the UK’s heating, ventilation and air conditioning markets. Contact us on 0115 8714 777 or email firstname.lastname@example.org.