Jurisdiction(s):
United Kingdom

Key definition

Law definition

What does Law mean? In legal practice, Law describes the body of binding rules governing parties’ rights and obligations in the relevant jurisdiction(s). It is not a single statutory or case-law definition; in contracts it is a descriptive catch‑all used to capture all sources of applicable law. Law includes: (a) any primary or secondary legislation (including regulations, statutory instruments and byelaws) in force from time to time that applies to a party or to the place the Services are provided; (b) the common law and, where applicable, equity; (c) any binding court order, judgment or decree; (d) any applicable industry code,

Restraint of trade in employment: doctrine, lawful exceptions, indirect restraints, and validity of post-termination covenants (UK)

Published by a LexisNexis Employment expert

Practice notes

This Practice Note

This Practice Note explores the restraint of trade doctrine and the circumstances in which Lawful exceptions may arise within employment. It assesses when the doctrine is engaged and reviews instances of indirect limitations or covenants, together with related payments and how the courts have approached them. It also addresses when a post-termination restriction (that is, a restrictive covenant) will be lawful.

Pensions
Profit-share
Bonus
Commission
Training costs
Retention bonuses
Garden leave
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At Common law, the core principle is that a person is entitled to pursue their trade or profession when, where and how they choose. As articulated in Nordenfelt by Lord MacNaughton, both the public and the individual benefit from the free exercise of trade; interference with liberty in trading, and restraints of trade as such, absent further justification, offend public policy and are void.

Accordingly, the baseline for post-termination restrictions is that restraints of trade are unlawful unless they fall within recognised lawful exceptions.

Lawful exceptions to the prohibition on restraint of trade include:

restraints imposed by statute —for example the prohibition on people undertaking

...

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Web page updated on 21/05/2026

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