Hot on the heels of our previous blog, the High Court has recently upheld restrictive covenants contained in an unsigned employment contract.

Much like any term of employment, restrictive covenants are only enforceable if the employee has agreed to be bound by them. This is why the covenants are often included in the employment contract, which is then signed and returned by an employee.

The High Court decision concerned an employee promoted to a senior management role. Some time after the promotion, he was offered a new employment contract which incorporated new benefits and restrictive covenants.

The employee never signed the new employment contract but applied for two new benefits offered under its terms. The High Court said that by applying for the benefits, the employee impliedly accepted the all of the terms of the new employment contract, including the restrictive covenants.

This case demonstrates the perils posed to employers who do not ensure employees sign and return employment contracts, particularly if the employer wishes to enforce the covenants.