What is Restrictive Covenant ?
In the context of employment contract, a restrictive covenant is typically a clause which :
Some typical examples of restrictive covenants
Legal remedies & Injunction for Breach of Restrictive Covenant
If the employer finds out the leaving employee has committed a breach of the restrictive covenants, the employer may consider taking the following legal action :
1. Apply to the Court for an Injunction order to stop the leaving employee from engaging in the restricted activity;
2. Apply to the Court for an order that the leaving employee to pay damages and compensation to the employer;
3. Take out legal action against the new employer (usually the competitor) for inducing the employee to breach his restrictive covenant/ contract.
To obtain an injunction, the employer will need to show loss, or the potential for immediate loss, i.e. the threat of loss is imminent. For example, loss can be the diversion of revenue to a competitor, loss of profit to the company or there is damage to the reputation of the company.
For legal advice or services on employment disputes, please contact CHOW & CHEUNG, Hong Kong Solicitors & Notary Public
Tel: +852 2856 3799 Email:firstname.lastname@example.org
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