Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

This post examines the objectives of employee who want to leave their current employer and set up a new business in the context of UK employment law and contract law. It mainly focuses on how employees can get into trouble and what steps they should take.

The employee’s objectives:

  1. Set up and run competing business
  2. Avoid being sued

If you want to leave your current job and set up a competing business there are a number of contractual and employment law issues which may involve you in litigation in the future. Therefore the first thing to do is check your contract of employment – what are the express terms of your contract? Particularly, are there any restrictive covenants which prohibit you from engaging in certain actions for a limited period of time after your contract of employment terminates? Common restrictive covenants are:

  • Non-compete clauses
  • Garden leave clauses
  • Non-solicitation clauses

Restrictive covenants are prima facie void as they are in restraint of trade. However, the courts recognise that employers have a right to protect their commercial interests when their employees leave, especially if the employees have been party to especially sensitive information or have been exposed to particular clients. An employer can therefore utilise common commercial law restrictive covenants if it can show that:

  • It has a legitimate proprietary interest that it is appropriate to protect; and
  • The protection sought is no more than is reasonable having regard to the interest of the parties and the public interest

Non-compete clauses seek to prevent employees from engaging in a particular trade or offering particular services that would compete with their former employer after the termination of their contract. It is generally deemed unreasonable for a non-compete clause to last for longer than 12 months post-termination. The non-compete clause may limit the prohibition of competition to a specific geographic area, such as the City of London. The less restrictive the non-compete clause, the more reasonable it will be likely to be (as is the case with all restrictive covenants) in commercial law terms.

Garden leave clauses seek to prevent employees from resuming employment immediately but forces the employee to serve out their notice period away from the office. This serves two potential purposes – it protects the commercial interests of the employer and it prevents a competitor from engaging the employee and using the information that the employee has. This serves to protect the employer’s information and its goodwill with its clients.

Non-solicitation clauses seek to prevent an employee from “soliciting” the clients of their former employer after they have left employment. Employees are therefore generally prevented from contacting clients that they had business dealings with at their previous employer in the (normally) 24 months prior to the termination of the contract of employment. The length of the non-solicitation period is normally up to 12 months but sometimes as little as 3 months.

As well as being subject to any express restrictive covenants in (or annexed to) the contract of employment, employees also have a number of implied duties towards their employer, such as the duty to maintain confidentiality relating to trade secrets. How the line is drawn between what is a trade secret and what has is normal commercial information can sometimes be difficult to draw but employees should be wary as to what information they divulge to any person after they leave employment – the watchword is always “less said soonest mended”.

Should you receive a letter from your previous employer asserting that you are in breach of contract (because, for example, you’re competing with your employer) you should seek specialist legal advice. It’s better to be prepared than risk being caught out when it comes to litigation. However, there is a big difference between receiving a pre-claim letter and actually having proceedings issued against you – in a lot of cases the matter never gets as far as litigation but is either settled or the employer loses interest in enforcing the contract.

About Chris Hadrill

Chris is a specialist employment lawyer at Redmans. He specialises in contentious and non-contentious employment matters, including breach of contract claims, compromise agreements and Employment Tribunal cases. He writes on employment law matters on a variety of websites, including Direct 2 Lawyers, Lawontheweb.co.uk, LegalVoice, the Justice Gap and his own blog. Contact Chris by emailing him at chadrill@redmans.co.uk

Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

Share →

Leave a Reply

Your email address will not be published. Required fields are marked *


Our awards

Request a callback

    Your first name (required)

    Your last name (required)

    Your email (required)

    Your telephone number (required)

    Brief details of your enquiry

    Contact us

    Please feel free to discuss your own position and concerns. Contact your nearest office on:

    T: 020 3397 3603
    E: enquiries@redmans.co.uk
    W: www.redmans.co.uk


    4.78 Average

    262 Reviews


    I found the advice I was given by Redmans Solicitors to be clear and useful and found the solicitor on my case to be both knowledgeable and approachable.

    Posted 1 day ago

    Karen T

    Great service. Thank you.

    Posted 2 days ago


    Excellent service from Chris & Mel Chin. The best outcome was achieved from the redundancy process. They were extremely thorough, listened carefully and acted swiftly on my behalf. I highly recommend Redmans Solicitors

    Posted 3 days ago

    Shanine M

    Excellent service, thank you so much!

    Posted 4 days ago


    I found Caroline and Chris very Helpful and provided excellent service. Caroline especially provided great legal advice and made me feel at ease with the whole process. I would highly recommend them. Thank you!

    Posted 5 days ago

    Gayle B

    Excellent company very professional would definitely recommend

    Posted 6 days ago

    Alex K

    Redmans provided an excellent service, timely and effective. Will definitely recommend.

    Posted 6 days ago


    Great job done on my employment law

    Posted 6 days ago

    Dominica S

    Caroline & Chris were very prompt and efficient.Very happy with the service and will definitely recommend Redmans Solicitor to everyone !

    Posted 1 week ago

    Sandra K

    If you are looking for a group of solicitors who are Professional, Caring and on point, then look no futher than Redmans. I was literally hand held through out my case. Can not find fault with this company, very happy with the result and the service i received. Would highly recommend Redmans.

    Posted 1 week ago


    I found dealing with Redmans a pleasure. I got to speak to someone quickly, the advice was profferred promplty and the service was not 'pushy'. In addition, the administration was excellent. What more could you ask for?

    Posted 1 week ago


    Redmans did a brilliant job regarding my redundancy agreement. I miss read an extra charge which wasnt the case so doing a new review to clarify. I would recommend Redmans for any employment law issues you may have.

    Posted 1 week ago

    Christos G

    Great legal advice and quick correspondence. Very supportive and helpful through the entire process. Thank you Redmans!

    Posted 1 week ago


    Chris Hadrill advised me on a redundancy settlement agreement. He was very responsive, easy to deal with and gave me good advice at a stressful time.

    Posted 1 week ago

    Zara M

    Rana at Redmans gave me support and confidence I needed to ensure a wrong, was put right. I couldn’t recommend enough.

    Posted 1 week ago

    Stuart T

    Chris provided an excellent service, he was efficient and friendly and I had no doubt when recommending him to my colleagues

    Posted 1 week ago


    Excellent service, prompt responses. Chris Hadrill provided excellent and efficient service.

    Posted 1 week ago

    Jane M

    Wonderful solicitors who really listen to you and who are there to offer expert legal advice but they also have a personal touch and you really feel supported both from a legal aspect but also from a personal aspect. They really listen .

    Posted 2 weeks ago


    They dealt with my case professional and swiftly. The advise was helpful and enabled me to make the right decisions in my case.

    Posted 2 weeks ago


    I have received a great legal advice from Redmans on a very short notice. I’d highly recommend them.

    Posted 2 weeks ago

    Michael D

    Excellent, efficient advice - the whole matter was concluded with minimum fuss and an excellent outcome.

    Posted 2 weeks ago