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Last updateTue, 24 Feb 2015 5pm

Shearman & Sterling

Shearman & Sterling

The courts take a markedly different approach to enforcing covenants in sale-and-purchase and investor agreements compared to those in employment contracts, reports Sam Whitaker

Restrictive covenants in employment contracts are familiar territory for most private-practice and in-house employment lawyers but they may be less familiar with covenants in sale-and-purchase agreements (SPAs) and shareholder or investment agreements. Often, in a transactional context (and particularly in private equity (PE) transactions), it is useful for employment lawyers to have a basic understanding of the legal issues relating to the enforceability of such covenants and how they interrelate with each other. This article looks at the basic enforceability issues with such covenants.