RESTRICTIVE covenants, limiting the ability of ex-employees to compete with their former businesses, are very much back in fashion, according to a Worcestershire employment lawyer.

Ashley Gurr, employment partner at Redditch solicitors Kerwoods, says this follows a number of recent rulings that have shown courts are willing to enforce them. It comes in the wake of a surge in the numbers of people striking out on their own, with 581,173 new businesses registered last year nationally, 18,337 in Birmingham, the highest total outside London and the South-east, according to Startup Britain.

Mr Gurr said: "While this encouraging entrepreneurial trend is good for the country, it may not be good for your business if an employee leaves, sets up on their own and seeks to ‘steal’ your contracts. So it is ever more important to put restrictive covenants in place to prevent that happening.

“A few years back a general perception was doing the rounds whereby restrictive covenants in employment contracts were deemed unenforceable and not worth the paper they were written on. That is not the case at all. Yes, there is an issue if they are badly drafted or over-restrictive, but that is where expert advice is important.”

However, he added: "Catch-all restrictive covenants may well be ruled non-enforceable. They need to reflect the nature of your business and the particular circumstances of the employee. So they must be reasonable, necessary to protect legitimate business interests and restricted in duration. Courts will take a dim view of attempts to impose a general restraint of trade denying an employee the right to make a living in their chosen industry or profession.

“Every company has vital and sensitive information which needs to remain confidential. For an employee to go off and make capital from such ‘secrets’ could be disastrous. Hence the need for restrictive covenants because it is important your business is protected.”