Jezamine Fewins, head of litigation at Lewis Silkin Hong Kong, shares practical advice on protecting business interests while respecting employee mobility
Companies across Asia are facing a rising tide of employee movement. As top talent moves across firms, industries, and borders, employers have become increasingly focused on tightening post-employment restraints to protect their business interests.
But not all restrictive covenants are created equal — or are enforceable.
Jezamine Fewins, head of litigation at Lewis Silkin Hong Kong, explains that overly broad restrictions may look tough on paper, but in court, they often fail. She walks through what makes a restriction fair, enforceable, and ultimately effective under Hong Kong law.
How HK courts assess post-employment restrictions
In Hong Kong, restrictive covenants are treated as restraints of trade and are unenforceable unless they are reasonable and serve to protect legitimate business interests, i.e. confidential information, stability of the workforce and client relationships.
Fewins says the court applies the American Cyanamid test when assessing whether to grant an interim injunction against a former employee.
"The court considers whether there's a serious issue to be tried, whether damages would be an adequate remedy, and where the balance of convenience lies," she says. Crucially, the restriction must be reasonable in scope, and tailored to the role in question.
"The time for ascertaining the reasonableness of a non-compete covenant is always the time of the making of that employment contract, before the employee starts work." she adds.
Courts distinguish between different types of restrictions. "Non-solicitation clauses are easier to justify than non-compete clauses," Fewins says.
"A worldwide non-solicit might be reasonable if the employee had global client relationships. But a worldwide non-compete? That’s much harder to enforce."
In fact, the courts have rejected non-compete clauses that lacked geographical limits or stretched beyond what was necessary to protect the employer. They want to ensure employees aren't prevented from making a living in their area of expertise.
Fewins also warns that employers should act quickly when applying for an interim injunction as delay may indicate that there is no risk of irreparable harm – more than a few weeks have proven fatal in some cases.
What the Manulife and Cantor Fitzgerald cases revealed
Fewins points to recent high-profile Hong Kong decisions that provide useful guidance.
In Manulife Financial Asia Ltd v Kenneth Joseph Rappold [2024] HKCFI 989, the court refused to enforce a 12-month non-compete clause lacking geographical limitation and a temporal backstop, finding the worldwide protection was broader than necessary for a former CFO’s Asia-based role, and that the restriction should only apply to his recent activities and not everything he did throughout his employment with the company.
The duration was also too long, in most cases 4 months is considered the maximum for a non-competition clause.
Meanwhile, in Cantor Fitzgerald v Boyer & Ors [2012] HKEC 301, the Court rejected 12-month non-solicitation and non-dealing clauses against senior employees who resigned en masse, ruling they were excessive and failed to define key terms like “competitor” clearly.
"In Cantor Fitzgerald, the court found that 12-month restrictions on client solicitation, poaching, and dealing were too long," she says. "The takeaway is: six months is usually the upper limit, unless you have hard evidence for needing longer."
In that case, four senior employees resigned on the same day to join a competitor. While Cantor alleged coordinated breach of contract and fiduciary duties, the court found that there had been no unlawful conduct on the part of the employees. Many of the contractual clauses were deemed excessive and unenforceable.
Manulife offers another cautionary tale. The company pursued one employee in court to deter others, but the strategy backfired. "When Manulife lost, other employees with the same contract terms would have felt empowered to leave," Fewins notes.
HK courts now expect tailored clauses
One of the biggest pitfalls Fewins sees is the use of generic, boilerplate restrictions. Courts want precision.
"Blanket clauses that try to apply the same restraint across all employees are very likely to be struck out," she says. "You need to tailor the restriction to the role… Not just the title, but the actual work the employee does."
That means reviewing contracts each time an employee is promoted, or their duties change. A clause suitable for a junior employee might not work for someone at the executive level, and vice versa.
Defining key terms is equally important. In Cantor Fitzgerald, the court was unconvinced that the new employer was truly a competitor.
"They hadn't even defined 'competitor' in the contract," Fewins points out. "That ambiguity worked against them."
Post-employment restrictions in remote work
In a world of remote work, cross-border enforcement is becoming more common.
While Hong Kong courts haven’t yet ruled on a post-employment case involving a "work-from-anywhere" employee, Fewins says the courts will stick to the core principle: does the restriction match the business risk?
"If someone is working from Bali but all their clients are in Hong Kong, then a Hong Kong-specific restriction could still be enforceable," she says. "It’s always fact-sensitive."
Attempts to use vague wording like "similar capacity" in lieu of specifying a location or scope are unlikely to succeed. Fewins references the Manulife case where the court rejected the argument that "similar capacity" implied a geographical limitation.
Employee satisfaction as the best protection
While companies may be tempted to rely on tough contracts to prevent talent loss, Fewins says the best deterrent is actually a good working environment.
"Happy employees don’t usually run off to competitors," she says.
"At Cantor Fitzgerald, even though their employees were well-paid, they left because of management issues and a highly pressured work environment."
She advises employers to take a holistic approach. Beyond contract clauses, companies should invest in leadership, work-life balance, and long-term incentives.
"We’re seeing more firms offer equity or retention bonuses to make staying more attractive," she adds.
Incentivising rather than restricting
Fewins says that in the financial industry, a growing trend is for employers to pay former employees during the restricted period, even though it’s not required by Hong Kong law.
"That approach works. The employee is happy because they're being paid to sit it out. The former employer protects their business. And the new employer avoids litigation by waiting for the restriction to lapse," she explains.
"Even though a lot of these covenants are far too long in duration to be enforceable, and if the employee challenged them in court they would be struck out... because the employee is being paid, everyone’s happy. So, it works."
Best practices for post-employment restrictions
So, what makes a clause defensible? Fewins says employers should also ask: "If I’m going to put a six months restrictive covenant in my contract so that I can keep an employee out of the market when he/she decides to leave, I need to consider if that is enough time to recruit a replacement, bring them onboard and then build a relationship with my clients?"
"Employers need to consider the talent pool in Hong Kong," Fewins notes.
"It’s been shrinking with the exodus of people leaving, so it takes longer to hire and bed in replacements if someone leaves."
She lists a few key practices:
- Tailor clauses to actual duties, not just titles
- Keep the duration short unless supported by evidence
- Review contracts with each promotion or role change
- Define key terms clearly, especially "competitor" or "similar business"
- Ensure restrictions are proportionate to business risk
She recommends that employers avoid non-compete clauses altogether unless absolutely necessary. "If you have good confidentiality, non-solicit, non-poaching and non-dealing clauses, you don’t need a non-compete," she says.
That makes the business case for well-considered restrictions stronger, but only when balanced with fairness and proportionality.
HK courts are ‘skeptical of overreach’
Fewins says the legal trend is clear: courts expect more thoughtfulness, not more control. "Courts are skeptical of overreach. They want to see that you’ve considered the actual risk and acted proportionately."
Her advice to HR? Focus on protecting the legitimate interests and not preventing competition or keeping employees out of work.
More importantly, instead of relying heavily on legal sticks, focus on building a workplace culture that values and retains people.
"Employees are far less likely to leave if they feel supported, respected, and fulfilled," she says. "Good contracts matter, but good culture matters more."
