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Restrictive Covenants in Employment Contracts

One of the more controversial areas in employment law is the effect of restrictive covenants often found in employment contracts. These restrictive covenants can take various forms such as non-competition or non-solicitation clauses. Their basic effect is to prevent a departed employee from competing with his previous employer either through the use of information or technical knowledge acquired during the term of the employee’s employment or approaching customers of his previous employer. There is an inherent conflict in the interests of the employer and the past employee which the Court struggles with when dealing with restrictive covenants and the court tries to strike a balance often to the dismay of one of the parties. The key interest of the employer that it seeks to protect through the use of a restrictive covenant typically is its existing client base and/or technical knowledge that the employee has gained access to during the course of his/her employment. On the other hand, th...

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