This clause prevents you from working or operating a business within a certain distance (for example, 5 miles or 10 kilometers) from your current employer's location for a set period after you leave. It is a geographic limit designed to protect the employer's local customer base and market share. Courts will enforce this only if the radius is reasonable for the type of business—a 5-mile radius for a local plumber might be enforceable, but a 50-mile radius for a small neighborhood shop would likely be struck down as excessive. For example, if you manage a gym in London and sign a radius restriction, you might not be allowed to open or work at another gym within 3 miles for 12 months. The legal principle is that employers can protect their location-based business, but not prevent you from working anywhere in the country.
Negotiate the radius down to the smallest practical distance—if the business is local, push for 1-2 miles rather than 5 miles. Also insist on a short time period (6-12 months) since the employer's competitive advantage fades quickly. Check whether the restriction applies only to competing businesses or all work in the field, and try to carve out exceptions for remote work or different customer types that do not directly compete.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause prevents you from working or operating a business within a certain distance (for example, 5 miles or 10 kilometers) from your current employer's location for a set period after you leave.
Why should I care about this clause?
It is a geographic limit designed to protect the employer's local customer base and market share.
What are my options?
Courts will enforce this only if the radius is reasonable for the type of business—a 5-mile radius for a local plumber might be enforceable, but a 50-mile radius for a small neighborhood shop would likely be struck down as excessive.
How does this affect small businesses?
For example, if you manage a gym in London and sign a radius restriction, you might not be allowed to open or work at another gym within 3 miles for 12 months.