What Does “Restrictive Covenant” Mean in a Contract?
A contract provision that restricts an employee's activities during or after employment, including non-competes, non-solicitation, and confidentiality.
Detailed Explanation
Restrictive covenants are promises not to do something. In employment, they typically include non-competition (can't work for competitors), non-solicitation (can't recruit employees or solicit customers), and confidentiality (can't disclose secrets).
Enforceability varies dramatically by jurisdiction. Some states heavily restrict or ban certain covenants. Courts balance employer protection against employee mobility rights.
Example in a Contract
“Employee agrees to the restrictive covenants set forth in Sections 8 through 11, which include confidentiality, non-competition, non-solicitation of customers, and non-solicitation of employees.”
Why It Matters
Restrictive covenants can limit your career for years after leaving. Review each restriction carefully—some may be unenforceable in your state, while others could significantly impact your options.
Have a Clause with “Restrictive Covenant”?
Paste your contract clause below for instant AI analysis. Get risk assessment, plain English explanation, and suggested improvements.