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


    4.79 Average

    339 Reviews

    James B

    Great and prompt service- would recommend and use again!

    Posted 9 hours ago

    Emma L

    Excellent service. From start the team where efficient and helpful, the whole process was made easy on a very stressful and upsetting situation. They worked well to support my situation and negotiate. Would highly recommend. Thank you to Chris, Sacha and the team.

    Posted 10 hours ago

    Brian H

    I must say, not seeing any of you and doing all on-line works very well. Very pleased with the service and would recommend you. Fantastic service. Many thanks Brian Haines

    Posted 11 hours ago

    Sheenu A

    Professionals with excellent quality of work.

    Posted 6 days ago

    Maris T

    I recommend Redman's Solicitors. Chris was very helpful and informative. He provided a speedy and efficient service at a reasonable price.

    Posted 1 week ago


    quick response, friendly staff, my issue was smoothly done. superb

    Posted 2 weeks ago


    Overall I was very satisfied with the service I received. Right from making initial contact to being contacted by Chris Hadrill. He was easy to talk to, friendly and professional and gave sound advice. I would certainly use Redman's again. Thank you for all your help, Chris. I would rate my experience as 5 star.

    Posted 3 weeks ago

    Jane K

    4 stars for quality of advise. the team are good but it feels rushed sometimes and hard to contact.

    Posted 4 weeks ago

    Arabella B

    I am so grateful to Caroline Lewis at Redmans Solicitor’s for helping me with my Unfair Dismissal Case. I was seriously impressed how easy Redmans made the whole case, and am very happy with my Settlement. I have recommended your firm to at least 5 people in the last 3 months.. Thank you Caroline and everyone at Redmans. You are Brilliant .

    Posted 1 month ago


    Highly professional and efficient service.

    Posted 1 month ago

    Tanya T

    I had the pleasure of Chris and Sacha’s experience with a work matter. They made me feel at ease with the process and explained everything thoroughly. Would happily recommend Redmans especially Chris and use them if needed I’m the future. Thank you!

    Posted 1 month ago


    I used the services of Redmans solicitors and was a quick outstanding service I engaged them in a settlement agreement after been made redundant extremely professional at all that was done and would definetly use them again

    Posted 1 month ago

    Adrian A

    Spot on support, enough to get the matter at hand sorted. No beating around the bush, no nonsense - got the job done and we all moved on.

    Posted 1 month ago

    Mark Q

    Five Stars I was most impressed by the attention, courtesy, speed and above all, professionalism in dealing with my Settlement Agreement. I would certainly have no problem in recommending this firm to anyone in need of their services.

    Posted 1 month ago

    Ade A

    I was surprisingly impressed by how Redmans Solicitors handle my case. From the moment I call them to the absolute end of my case, they always look after my best interest.

    Posted 1 month ago

    Malcolm P

    they were there when others were not

    Posted 1 month ago


    Excellent service all the way through from start to finish. Really great support and guidance from the team, they secured the offer that I wanted. I can't recommend Redmans highly enough and will be sure to use their services again should the need arise.

    Posted 1 month ago


    Efficient and quick service!

    Posted 2 months ago

    Karen B

    Quick response very helpful Issue raised dealt with very quickly

    Posted 2 months ago

    Carmen T

    Redmans give Great service and advice on reading contracts. They can explain all the solicitors jargon into words that you can understand. I received excellent service an I will use them again and again.

    Posted 2 months ago


    Very grateful for Mel’s efforts in handling my case from start to finish which I would have found very stressful without it. She was very professional, friendly and we had a positive outcome. Highly recommend.

    Posted 2 months ago