Partner Susan Thompson discusses tightening non-compete restrictions in the aftermath of the pandemic
Historically, non-compete restrictions and rows about not soliciting former co-workers or dealing with former clients have been common in the recruitment market, and in the City. But as the hospitality sector was one of the worst affected by the pandemic, and now faces staff shortages for various reasons including Brexit — which has seen many workers return to their home countries in the European Union – employers have faced new challenges trying to retain staff.
"A charismatic maitre d’ or sommelier can be very influential with customers at a top end restaurant. They're being poached. They are in short supply, and can make or break a restaurant experience.
"Three or four years ago if I was being asked to draft contracts for senior restaurant staff, they weren't really looking at putting post term restrictions in there. There was a concern they might not be enforceable.
"As the talent pool has dried up the hospitality sector has faced great difficulties in recruitment. People want to hold onto the talent they've got. A lot of the top restaurants want a particular style of kitchen or front of house staff and they invest money in them."
In response to fears that a chef might leave and take their colleagues with them, lawyers are also seeing an increase in clauses to stop team moves.
"They might say that if there's more than two of you, you are prohibited from joining a place together, or when you get there you can't then solicit or poach your colleagues that you've left behind."
Employees will usually have to wait out the expiration of these clauses for three-to-six months, but it depends how established the business is.
"Chefs have a right to go out and earn a living but there is also a lot of confidential information that goes into developing a menu and creating dishes. The restaurant owner doesn't want that to be lost."
Susan's comments were published in Law360, 23 November 2022, and can be found here.