A recruiter resigns.
Two weeks later, they’ve joined a competitor.
Three weeks after that, they’re speaking to the same clients and candidates they worked with at your business.
At that point, most recruitment agency owners say the same thing:
“It’s fine. We’ve got restrictive covenants in place.”
But here’s the problem.
A lot of restrictive covenants in recruitment don’t actually stand up in court.
We regularly see employment contracts that look solid on paper, but when reviewed closely, they fall apart due to poor drafting, overreach, or simply being out of date.
And the reality is, most businesses only find this out when it’s too late.
Red Flag 1: The Clauses Are Too Broad
One of the most common issues is overreach.
For example:
- Restrictions covering all clients across the business
- Clauses applying to candidates the recruiter never worked with
- Global restrictions for roles that operated in a local market
Courts will only enforce restrictive covenants if they go no further than reasonably necessary to protect legitimate business interests.
If the clause is too wide, it risks being unenforceable.
Red Flag 2: The Same Contract Is Used for Everyone
Another issue we see regularly is a “one-size-fits-all” approach.
Junior consultants, senior billers, and directors all on identical restrictive covenants.
From a legal perspective, that can be a problem.
Restrictions should reflect:
- the individual’s seniority
- their influence over client relationships
- access to confidential information
What’s reasonable for a director is unlikely to be reasonable for a junior recruiter.
Red Flag 3: The Contract Hasn’t Been Updated
Recruitment businesses move quickly.
People get promoted, take on new clients, and grow their influence.
But contracts often stay exactly the same.
Restrictive covenants are assessed based on when the contract was signed, not when the issue arises.
So, if a recruiter has progressed significantly but is still on their original contract, the enforceability of those covenants may be weakened.
Most Businesses Only Find This Out When It’s Too Late
In practice, these issues usually surface at the worst possible time:
- A recruiter leaves
- They join a competitor
- Clients start moving
That’s when businesses try to rely on their restrictive covenants.
And that’s when the gaps in the contract become clear.
Read the Full Breakdown
If you run a recruitment business and want to understand whether your contracts would actually protect you, we’ve broken this down in more detail here.
We’ve also included a practical checklist to help you sense-check your current contracts.
