Restrictive covenants governed by foreign law

Employers frequently seek to protect their businesses by including non-compete, non-dealing or non-solicitation covenants in their employees’ contracts. In English law, such covenants are subject to the doctrine of restraint of trade, and are enforceable only if they are no wider than reasonably necessary for the protection of the employer’s legitimate business interests. But in today’s globalised marketplace, the English courts may be asked to enforce restrictive covenants in contracts governed by a law other than English law, which may balance the competing interests of freedom of contract and freedom of trade in a different way. How should English courts deal with such contracts?

• Article from Employment Focus, July 2008 doc