{"id":174788,"date":"2022-08-19T04:49:02","date_gmt":"2022-08-19T03:49:02","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=174788"},"modified":"2026-03-23T05:03:28","modified_gmt":"2026-03-23T05:03:28","slug":"restrictive-covenants","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-contracts\/restrictive-covenants\/","title":{"rendered":"What is a Restrictive Covenant in the UK?"},"content":{"rendered":"\n<p>If you run a business or work with contracts, you will likely encounter restrictive covenants. These clauses carry different meanings depending on the context, and understanding them helps you use them effectively. You may also find yourself bound by a restrictive covenant, so knowing your legal obligations is equally important.<\/p>\n\n\n\n<p>This article explains key points about restrictive covenants and provides guidance on the most common types.<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2025\/03\/14011310\/LegalVision-UK-Guide-to-UK-Employment-Disputes.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">Guide to UK Employment Disputes<\/div>\n            <div class=\"body-text\">\n                <p>Learn how to manage employment disputes and protect your business from legal action. <\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.uk\/guide-to-uk-employment-disputes.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">What is a Restrictive Covenant?<\/h2>\n\n\n\n<p>Put simply, a restrictive covenant is an agreement not to do something you would otherwise be able to do. In this way, it is \u2018restrictive\u2019 of your actions, and it limits what you can do. In a commercial setting, you can use several <a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/covenant-loan-agreement\/\">types of covenants<\/a>.&nbsp;<\/p>\n\n\n\n<p>The rest of this article will explain some key points around those types of restrictive covenants.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A Non-Compete Restrictive Covenant<\/h2>\n\n\n\n<p><a href=\"https:\/\/legalvision.co.uk\/employment\/how-does-a-non-compete-clause-work-in-england-and-wales\/\">Non-compete clauses<\/a> protect a business&#8217; interest by ensuring information stays private instead of entering the public domain. For example, you may have: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>valuable information; <\/li>\n\n\n\n<li>trade secrets; or <\/li>\n\n\n\n<li>intellectual property not protected by copyright or trade mark.<\/li>\n<\/ul>\n\n\n\n<p>A non-compete clause restricts an employee from competing with your business, either directly or indirectly. This type of clause usually includes a geographic area in which the non-compete clause applies. Generally, parties limit it to similar businesses for a specified time period. The clause can apply to a competing business or a business that the employee may set up which would compete with your business. The enforceability and scope of non-compete clauses may change significantly in 2026-2027. The government is currently consulting on proposals that could restrict or ban these clauses entirely. Businesses should monitor these developments closely when drafting new employment contracts<br>also compensate the employee.&nbsp;<\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center text-left 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This is also usually confined to an area, time period and similar businesses.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Non-Dealing Restrictive Covenant<\/h2>\n\n\n\n<p>Non-dealing covenants are similar to non-solicitation clauses. They refer to where a party is prevented from dealing with the suppliers or customers of your business. Dealing usually refers to engaging in transactions. This means that if you agree to a non-dealing clause but not a non-solicitation clause, the other party can approach your customers or employees, but they cannot enter into a transaction with them.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Non-Disclosure Restrictive Covenant<\/h2>\n\n\n\n<p>A <a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/non-disclosure-agreements\/\">non-disclosure clause<\/a> prevents the other party from taking: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>information;<\/li>\n\n\n\n<li>trade secrets;<\/li>\n\n\n\n<li>ideas; or <\/li>\n\n\n\n<li>data of your business. <\/li>\n<\/ul>\n\n\n\n<p>It is a good way of protecting confidential information as part of your business.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Protecting a Restrictive Covenant<\/h2>\n\n\n\n<p>The key point to remember is that restrictive covenants can be difficult to enforce in court. A restrictive covenant will usually be enforceable if it is to protect the legitimate interests of your business. If there is no legitimate business interest as part of the rationale behind the restrictive covenant, then a court is unlikely to enforce the restrictive covenant. <\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>Additionally, a restrictive covenant must be reasonably restrictive on the other party. To satisfy this, the restriction must be no more than necessary to adequately protect the business interest. As such, it is important to seek professional legal advice if you are thinking about getting a party to agree to a restrictive covenant.<\/p>\n<\/div>\n\n\n\n<p>If you successfully have your restrictions upheld in court, you may be entitled to compensation. Sometimes, a court will be willing to consider an injunction to protect your interest. An injunction is where a court requires a party to do or not to do something. Injunctions are discretionary, so it is up to the court whether it is an appropriate remedy in your situation or not.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Proposed Changes to Non-Compete Clauses<\/h2>\n\n\n\n<p>The government has consulted on significant restrictions to non-compete clauses in employment contracts. Proposals have included:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Limiting the duration of non-compete clauses to between three and six months maximum;<\/li>\n\n\n\n<li>Restricting their use to senior or higher-paid employees only;<\/li>\n\n\n\n<li>Limiting their application to smaller companies;<\/li>\n\n\n\n<li>A potential complete ban on non-compete clauses.<\/li>\n<\/ul>\n\n\n\n<p>These changes could fundamentally alter how businesses protect their interests when employees leave. If implemented, employers may need to rely more heavily on other types of restrictive covenants, such as: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>non-solicitation;<\/li>\n\n\n\n<li>non-dealing; and <\/li>\n\n\n\n<li>non-disclosure clauses, to protect their legitimate business interests.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<p>A restrictive covenant is an important tool in commercial and employment contracts. The result of a restrictive covenant is that the party who has agreed to the contract cannot do a specific action. Importantly, a restrictive covenant must be a reasonable restriction that is no more than necessary to achieve a legitimate business interest. If it is not, a court will be unwilling to enforce it. If a court is not willing to enforce the restrictive covenant, then it has very little value for you. Some common types of restrictive covenants include non-compete, non-soliciting, non-dealing, and non-disclosure clauses.<\/p>\n\n\n\n<p>Please note that, as of February 2026, significant changes to non-compete clauses are currently under consultation and may be implemented in the near future.<\/p>\n\n\n\n<p>If you need help in drafting your commercial contracts, LegalVision provides ongoing legal support for all businesses through our fixed-fee legal membership. Our experienced&nbsp;<a href=\"https:\/\/legalvision.co.uk\/services\/employment\/\">employment lawyers<\/a>&nbsp;help businesses across industries manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee.&nbsp;To learn more about LegalVision\u2019s legal membership, call <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or&nbsp;<a href=\"https:\/\/legalvision.co.uk\/membership\/\" target=\"_blank\" rel=\"noreferrer noopener\">visit our membership page<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1660879823803\"><strong class=\"schema-faq-question\"><strong>What is a restrictive covenant?<\/strong><\/strong> <p class=\"schema-faq-answer\">A restrictive covenant is a clause where the party to the clause agrees not to do something they would otherwise be able to do.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1660879833871\"><strong class=\"schema-faq-question\"><strong>Can I protect confidential information using a restrictive covenant?<\/strong><\/strong> <p class=\"schema-faq-answer\">Yes. A non-disclosure clause is a good way of protecting confidential information which you do not have an existing legal right over.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1771260939795\"><strong class=\"schema-faq-question\"><strong>Are non-compete clauses changing?<\/strong><\/strong> <p class=\"schema-faq-answer\">Yes, the government is consulting on significant restrictions to non-compete clauses. Proposals include limiting their duration to 3-6 months, restricting them to senior employees only, or potentially banning them entirely. These changes could take effect during 2026-2027.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1771260954231\"><strong class=\"schema-faq-question\"><strong>Are there any other employment law changes in 2026 that might affect restrictive covenants?<\/strong><\/strong> <p class=\"schema-faq-answer\">Yes. Some key changes include extended tribunal time limits (effective October 2026 and fire and rehire restrictions (effective October 2026). These changes increase employee protections and potential employer costs, so legal advice is essential when introducing or enforcing restrictive covenants.<br \/><\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"9eb4f72322\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/174788\" \/>            <input value=\"https:\/\/legalvision.co.uk\/commercial-contracts\/restrictive-covenants\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"What is a Restrictive Covenant in the UK?\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>If you run a business or work with contracts, you will likely encounter restrictive covenants. These clauses carry different meanings depending on the context, and understanding them helps you use them effectively. You may also find yourself bound by a restrictive covenant, so knowing your legal obligations is equally important. This article explains key points<a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/restrictive-covenants\/\">Continue reading <span class=\"sr-only\">&#8220;What is a Restrictive Covenant in the UK?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13414,"featured_media":183594,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"2755,173015,1737,1455,2823,174167","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[37],"tags":[20,21,39,40,412],"class_list":["post-174788","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-contracts","tag-small-business","tag-medium-business","tag-business-dispute","tag-dispute-resolution","tag-restrictive-covenant"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What are Restrictive Covenants? 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He advises on all aspects of employment law, both contentious and non-contentious. Saeidul has substantial experience in advising employers with day-to-day employment law and HR queries, including but not limited to discrimination, grievances, disciplinary matters, redundancies, tribunal claims and restrictive covenants.","url":"https:\/\/legalvision.co.uk\/author\/saeidulhaque\/"},{"@type":"Question","@id":"https:\/\/legalvision.co.uk\/commercial-contracts\/restrictive-covenants\/#faq-question-1660879823803","name":"What is a restrictive covenant?","acceptedAnswer":{"@type":"Answer","text":"A restrictive covenant is a clause where the party to the clause agrees not to do something they would otherwise be able to do.","inLanguage":"en-GB"},"inLanguage":"en-GB"},{"@type":"Question","@id":"https:\/\/legalvision.co.uk\/commercial-contracts\/restrictive-covenants\/#faq-question-1660879833871","name":"Can I protect confidential information using a restrictive covenant?","acceptedAnswer":{"@type":"Answer","text":"Yes. 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