Restrictive covenants in veterinary employment contracts: what every owner and employee should know

Restrictive covenants — sometimes called "restraint of trade" clauses — are a familiar feature of employment contracts in the veterinary profession. Whether you are a practice owner seeking to protect your business, or a vet surgeon, vet nurse, or support staff member considering your next career move, understanding what these clauses mean, when they are enforceable, and what to do if they seem unreasonable is essential.

What are restrictive covenants?

A restrictive covenant is a contractual term that limits what an employee can do after leaving their employment. In veterinary practice, the most common types are non-compete clauses (to prevent working for a competing practice within a defined area and time period), non-solicitation clauses (to prevent approaching former clients or colleagues), and non-dealing clauses (to prevent providing services to former clients even if they approach the employee). These clauses are designed to protect the legitimate business interests of the practice, such as client relationships, confidential information, and the stability of the workforce.

What is reasonable?

English law starts from the position that restrictive covenants are void as an unlawful restraint of trade, unless the employer can demonstrate that the restriction goes no further than is reasonably necessary to protect a legitimate business interest. The key factors a court will consider include the duration of the restriction, its geographical scope, and the breadth of activities it prohibits.

For veterinary practices, a non-compete clause of six to twelve months is common, though whether it is enforceable will depend on the individual circumstances. A radius of ten to fifteen miles may be reasonable for a rural practice, but could be excessive in a densely populated urban area where clients have many alternative providers nearby. Equally, a restriction must be proportionate to the employee's role: a senior vet surgeon with longstanding client relationships may justifiably be subject to a broader covenant than a receptionist or trainee nurse whose personal client connections are more limited.

Reasonableness is assessed at the time the contract is entered into, not at the time the restriction is sought to be enforced. This is a crucial point — and one that is increasingly relevant in today's veterinary market.

When covenants become unreasonable

If circumstances change significantly after signing the employment contract, a covenant that was once reasonable may no longer reflect reality. A promotion, a change of role, a practice relocation, or a fundamental shift in the competitive landscape can all affect enforceability. However, the legal position remains that the clause is judged as at the date it was agreed. This means that if the role has materially changed and the employment contract has not been updated with fresh consideration, there is a strong argument that the original covenant no longer applies to the current position.

If an employee believes a restrictive covenant in the contract is unreasonable, the first step is to take legal advice. In many cases, a sensible conversation with the employer — ideally before resignation — can resolve the issue. Employers should bear in mind that seeking to enforce an unreasonable covenant can be costly, reputationally damaging, and ultimately unsuccessful. Employees, for their part, should not simply ignore a covenant they consider unfair; doing so without proper advice carries real risk.

The impact of market consolidation and the CMA review

The veterinary profession is undergoing rapid structural change. The Competition and Markets Authority — the government body responsible for ensuring markets work well for consumers — has recently investigated the veterinary sector and raised serious concerns. Its findings highlighted that the consolidation of practices by a small number of large corporate groups has, in many local areas, significantly reduced the number of genuinely independent employers. Several major operators now own hundreds of practices across England, with sites in virtually every major town and city.

The CMA's findings have direct implications for the enforceability of restrictive covenants. The legal test for reasonableness requires a court to consider the competitive landscape in which the restriction operates. Where the CMA has itself identified that a local market is dominated by one or two corporate groups, this materially strengthens an employee's argument that a broad non-compete clause is an unreasonable restraint of trade. Put simply, if a corporate group owns most of the practices within a fifteen-mile radius, a covenant preventing a departing vet from working for any of them does not merely protect the former employer's legitimate interests — it operates as a near-total prohibition on practising locally. A court applying established principles is unlikely to uphold such a restriction, and the CMA's own market analysis may serve as persuasive evidence of the lack of genuine competition in the area.

Practice owners within corporate groups should review their template contracts carefully to ensure that restrictive covenants reflect the reality of local competition. Employees who find themselves caught by covenants that, in practice, prevent them from working at all should seek specialist legal advice — the law is firmly against restrictions that operate as an effective prohibition on earning a livelihood.

Practical steps

For practice owners, the message is clear: restrictive covenants must be tailored, proportionate, and regularly reviewed. A blanket clause applied to all staff regardless of seniority or role is unlikely to survive judicial scrutiny. For employees, knowledge is power. Understand what has been signed, take advice early, and do not assume that every restriction is enforceable simply because it appears in the employment contract. In a changing market, the law remains firmly on the side of fair competition and the right to work.