Salary FYI

Restrictive Covenant

Employment

A contractual clause that limits an employee's activities after leaving a company, including non-compete, non-solicitation, non-dealing, and non-disclosure provisions.

## Restrictive Covenant

Restrictive covenants are post-employment restrictions designed to protect a company's legitimate business interests.

### Types

| Covenant | Restricts | Enforceability |
|----------|-----------|----------------|
| Non-compete | Working for competitors | Varies by jurisdiction |
| Non-solicitation | Contacting clients/employees | Generally enforceable |
| Non-dealing | Doing business with clients even if they initiate | Less common, enforceable |
| Non-disclosure | Sharing confidential information | Almost always enforceable |
| Non-poaching | Recruiting former colleagues | Generally enforceable |

### Enforceability Factors

Courts evaluate: reasonableness of duration, geographic scope, scope of activity restricted, whether adequate consideration was given, and whether the restriction protects a legitimate business interest.

### Impact on Compensation

Restrictive covenants reduce job mobility. In Germany and some other countries, employers must pay 50% of salary during the non-compete period (Karenzentschädigung) to make it enforceable.