BUSINESS HELPDESK HELP DESK
PROTECTING YOUR BUSINESS WHEN KEY PEOPLE MOVE ON
Stefan Mars, Head of Legal at Halborns, which provides the BMF Intelligent Employment Service, explains how to get restrictive covenants right.
THE BUILDERS’ MERCHANT sector has always been relationship- driven.
Customers often buy from people as much as businesses. Branch managers build local reputations over many years. Regional sales managers develop trusted relationships with key accounts. Commercial teams know exactly what pricing and margin works, which suppliers are most valuable and where future opportunities lie.
That’s great while those people work for you. The challenge comes when they leave.
It’s often at that point that employers discover whether the restrictive covenants in their employment contracts are genuinely capable of protecting the business, or whether they’re little more than words on paper. Despite what many employers believe, restrictive covenants are not automatically unenforceable. Courts will enforce them where they are properly drafted and go no further than is reasonably necessary to protect legitimate business interests. Equally, poorly drafted or outdated restrictions are unlikely to stand up to scrutiny. So, what should employers be looking out for?
Identify what you’re trying to protect Too many contracts include generic restrictions without ever considering the commercial risks. For many merchants and suppliers, those risks are likely to include:
• Long-standing customer relationships
• Confidential pricing structures and commercial strategy • Relationships with key accounts • Pipeline opportunities and tender information
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• Senior employees and key teams The clearer you are about the interests you’re protecting, the more likely it is that any restrictions will stand up if they’re ever challenged.
Don’t stop someone earning a living Restrictive covenants are there to protect your business, not to punish someone for resigning. That’s an important distinction. Clauses that simply prevent someone from working for a competitor, regardless of their role or the circumstances, are unlikely to be enforceable. Instead, restrictions should be carefully targeted. For example, preventing a departing regional sales manager from approaching customers they dealt with during the last 12 months is much easier to justify than attempting to prevent them from working anywhere in the industry. The more focused the restriction, the more likely it is to be enforced.
Keep restrictions proportionate The duration of the restriction matters. Some employers assume six months is the maximum period that can ever be enforced. Others insert 12-month restrictions into every contract by default. Neither approach is optimal.
The question is always whether the restriction lasts no longer than is reasonably necessary to protect the business. For a junior employee with little access to confidential information, only a short restriction may be justified. For a senior commercial leader or branch manager with significant customer influence and access to sensitive information, a longer period may well be appropriate. Every restriction should reflect the role, not a one- size-fits all standard.
Review contracts as people progress One of the most common mistakes we see is employers relying on contracts signed years earlier. An employee may have joined as an assistant branch manager before progressing into a senior leadership, commercial or regional management role. Their responsibilities change, their access to confidential information increases and their customer influence grows, but their restrictive covenants remain exactly the same.
By the time they leave, the contract no longer reflects the role they’re in. Restrictive covenants should be reviewed whenever someone is promoted into a position carrying greater commercial responsibility.
Drafting is only part of the picture Even well-drafted restrictions work best alongside sensible day-to-day business practices. Employers should ensure confidential information is genuinely treated as confidential, access to sensitive commercial information is appropriately controlled, and robust onboarding and exit processes are followed. If you can’t demonstrate that information was valuable enough to protect while someone was employed, it becomes much harder to argue that it needs protecting after they’ve left.
A worthwhile investment
Restrictive covenants are rarely given much attention until a valued employee resigns. By that point, it’s often too late. Taking the time to review employment contracts, tailor restrictions to individual roles and keep them under regular review can make all the difference if key people move on.
Done properly, restrictive covenants remain an important tool for protecting customer relationships, confidential information and the long-term value of your business. Done badly, they may not be worth the paper they’re written on. BMJ
Stefan Mars is Head of Legal at Halborns and a senior employment lawyer with over 10 years’ experience advising employers across the builders’ merchant industry, including many members of the BMF. To find out more about the BMF Intelligent Employment Service, email:
info@halborns.com or call 0115 7180333
www.buildersmerchantsjournal.net September 2026
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