Restrictive covenants – a practical guide for STEM employers

Employers often rely on restrictive covenants to protect their business interests when employees move on. Within the STEM sector, individuals have access to intellectual property and strong client relationships – resources that, in the wrong hands, could provide competitors with a clear advantage. Restrictive covenants serve to prevent this knowledge being exploited post-departure and are frequently included in employment contracts, particularly for senior roles. However, questions of enforceability regularly arise.

This blog offers a practical overview of restrictive covenants, examining why they are used, their legal standing, and how employers can maximise their effectiveness.

What Are Restrictive Covenants?

In UK employment law, a restrictive covenant is a contractual clause intended to limit an individual’s actions during or after employment. The aim is to protect the employer’s commercial interests by preventing former employees from doing things like joining a competitor, soliciting clients or staff, or disclosing sensitive information.

Common types include:

• Non-compete: which seek to stop employees from joining a rival or starting a competing business (e.g. a senior scientist being barred from working in similar therapeutic areas (like oncology) for 6-12 months post-departure.
• Non-solicitation: which seek to prevent direct approaches to the company’s clients (e.g. an engineer joining a rival consultancy may be restricted from moving clients or projects to the new firm.)
• Non-dealing: which seek to prevent business interactions with the employer’s clients (e.g. a departing software sales executive who is banned from dealing with clients they managed in their last 12 months, even if contact is initiated by the client).
• Non-poaching: which seek to stop former employees from recruiting ex-colleagues – which can be essential in specialist STEM teams, which are often built around niche expertise, to preserve continuity and expertise.

Each covenant type can serve a legitimate protective function – but only if it is tailored to the actual risk, proportionate in scope and duration, and properly integrated into the employment contract. In fast-moving STEM sectors such as AI, biotech, and cyber, even a few months’ head start can be commercially critical. A well-drafted covenant can give an employer crucial breathing space when a key employee decides to move on.

Legal Distinctions: Scotland vs England & Wales

In England and Wales, new restrictive covenants must be supported by fresh consideration” – typically in the form of a salary increase, bonus, or promotion. Without it, the clause may not be enforceable.

In Scotland, no such consideration is required. The employee’s agreement is enough to make the covenant binding, provided it is consented to freely.

Tailored Drafting is Key

Covenants must be specifically drafted to reflect the employee’s role and level of risk. Generic or overly broad clauses, applied across all staff, often fail under judicial scrutiny.

For a restrictive covenant to be enforceable in the UK, it must:

• be reasonable in scope, duration and geographical range.
• Protect a legitimate business interest.

What counts as “reasonable” depends on factors like seniority, client exposure, and access to sensitive data. For instance, a 6-month UK wide non-compete covenant might be justifiable for a Chief Technology Officer, who had access to proprietary IP and strategic plans – but not for a junior analyst with routine tasks and no direct client relationships. The more senior or sensitive the role, the more justified the restriction. Vague or excessive terms will likely fail. Legal advice is often vital to ensure proportionality and legal validity.

Enforcing Restrictive Covenants

STEM employers often operate in regulated or high-stakes environments. If there is a concern that a covenant is being breached – or about to be – it can offer a powerful legal tool for swift action.

In Scotland, enforcement usually comes via interdict – a court order requiring someone to stop doing something. In England, the equivalent remedy is an injunction. To secure an interdict, employers must show:

• The covenant is valid and proportionate.
• A breach is happening or imminent.
• Damages alone would not provide adequate remedy.

For urgent situations, an interim interdict can be sought within days – or even hours. The court applies a two-stage test:-

1. Has a prima faciecase (i.e. an arguable case) been made?
2. Does the “balance of convenience” favour the employer – i.e. would they suffer irreparable harm without the interim interdict?

Employers may also seek damages, but proving financial loss – especially loss of goodwill or clients – can be complex and evidentially difficult.

Are Restrictive Covenants Worth It?

Yes – if used correctly. Thoughtful drafted covenants remain a vital tool for controlling risk and preserving competitive advantage. If, however, they are too broad, poorly drafted, or irrelevant to the employee’s actual role, they may offer little protection and be disregarded entirely.

To boost their chances of enforceability:

• Tailor them to the role– what suits a Chief Technology Officer will not suit an apprentice.
• Keep them proportionate– Avoid the temptation to seek protection for excessive periods of time.
• Review regularly – especially after promotions or role changes.
• Document changes properly– particularly when introducing new covenants mid-employment.
• Act quickly– delays can seriously weaken an employer’s position in court.

With deliberate drafting and periodic review, restrictive covenants are not just compliance tools, they are structural safeguards for business continuity and competitive resilience, particularly for employers operating within the high stakes STEM sector.

For expert advice on drafting appropriate restrictions contact any member of our employment team.