Associated Foreign Exchange Ltd v International Foreign Exchange (UK) Ltd and Another: ChD 26 May 2010

The claimant sought interim injunctions to enforce a restrictive covenant against solicitation of customers in a former employee’s contract. The employee, a FOREX dealer, had been placed on garden leave for three months and then his contract terminated. The contract sought a further twelve months’ restriction.
Held: At trial it was likely to be held that the twelve months’ duration of the non-solicitation clause went beyond what was reasonably necessary for the protection of AFEX’s legitimate interests. Cousins J thought it likely that any period beyond six months would be found objectionable. Also the extension of the covenant to potential customers was unreasonable.


Cousins QC J


[2010] EWHC 1178 (Ch), [2010] IRLR 964




England and Wales


CitedAmerican Cyanamid Co v Ethicon Ltd HL 5-Feb-1975
Interim Injunctions in Patents Cases
The plaintiffs brought proceedings for infringement of their patent. The proceedings were defended. The plaintiffs obtained an interim injunction to prevent the defendants infringing their patent, but they now appealed its discharge by the Court of . .
CitedCredit Suisse Asset Management Ltd v Armstrong and Others CA 3-Jun-1996
The employer provided fund management services to private clients. The notice periods for the various employees ranged between three and twelve months, but the handbook governing the terms of employment provided that during the respective notice . .
CitedLansing Linde v Kerr CA 1991
Staughton LJ held that ‘trade secrets’ embrace information used in a trade, restricted in its dissemination, and the disclosure of which would be liable to cause real or significant harm to the party claiming confidentiality. He considered the . .
CitedHerbert Morris Ltd v Saxelby HL 1916
For a covenant in restraint of trade to be treated as reasonable in the interests of the parties ‘it must afford no more than adequate protection to the benefit of the party in whose favour it is imposed.’ There is a need for the court to consider . .
CitedKores Manufacturing Co Ltd v Kolok Manufacturing Ltd CA 1959
When considering a post employment restrictive covenant on an employee, the court should allow that an employer has a legitimate interest in maintaining a stable and trained workforce. However, even accepting that interest, an employer has no . .
CitedStenhouse Australia Ltd v Phillips PC 2-Oct-1973
(Australia) An employer’s claim for protection from competition by a former employee under a restrictive covenant must be based upon the identification of some advantage or asset inherent in the business which can properly be regarded as, in a . .
CitedMason v Provident Clothing and Supply Co Ltd HL 1913
The employee had covenanted not to work for any of the employer’s competitors ‘within 25 miles of London’. The appellate committee held that the employer had failed to establish that the extension of the restraint to the area thus specified was . .
CitedTFS Derivatives Ltd v Morgan QBD 15-Nov-2004
The claimant sought to enforce a post employment restrictive covenant. There was a 6 months’ prohibition, post-termination of employment (less any period of garden leave) on any employment which was competitive with the business of a former . .
CitedInternational Consulting Services (UK) Ltd v Hart QBD 26-Jan-2000
The claimant sought damages and an injunction from their former employee, the defendant, saying that he had breached a post-employment restrictive covenant.
Held: The court upheld a 12-month non-solicitation clause. This was however a . .
CitedDowden and Pook Ltd v Pook CA 1904
When an employment covenant is unlimited, the covenant cannot be rewritten to limit its territorial extent. . .
CitedHome Counties Dairies v Skilton CA 1970
In construing an employee’s restrictive covenant, a court should disregard fanciful hypotheses or arguments leading to a reductio ad absurdum. . .
CitedDawnay, Day and Co Limited; Wilcourt Investments Limited v D’Alphen; Johnston; Parkman; Cantor Fitzgerald International CA 22-May-1997
The defendants were investment managers who left the plaintiff’s employment to take up posts with a rival. DD issued these proceedings claiming to enforce inter alia contractual undertakings by the defendants not to compete with the business of DDS, . .
CitedDairy Crest Ltd v Piggott CA 1989
When considering restrictive covenants in employment cases, courts must not seek to uphold a clause as reasonable only because the same clause was upheld in a different case. It is an error of law. There is no ‘tariff’ of what is reasonable. In this . .
CitedGilford Motor Co Ltd v Horne CA 1933
The defendant was the plaintiff’s former managing director. He was bound by a restrictive covenant after he left them. To avoid the covenant, he formed a company and sought to transact his business through it. At first instance, Farwell J had found . .
CitedM and S Drapers (a Firm) v Reynolds CA 1956
The defendant, a collector salesman entered the employment of a firm of credit drapers at a weekly wage of andpound;10. He brought with him the connection of customers acquired in previous employments. He entered into a restrictive covenant that he . .
CitedOffice Angels Ltd v Rainer-Thomas CA 1991
Reasonability Test of Post Employment Restriction
The court re-stated the principles applicable in testing whether an employee’s restrictive covenant was reasonable: ‘The court cannot say that a covenant in one form affords no more than adequate protection to a covenantee’s relevant legitimate . .
CitedBasic Solutions Ltd v Sands QBD 23-Jun-2008
The claimant sought injunctions to prevent misuse by former employees of confidential information in their possession and breach of a post employment restrictive covenant.
Held: Eady J said that he could not see, as a matter of general . .
Lists of cited by and citing cases may be incomplete.

Employment, Contract

Updated: 10 April 2022; Ref: scu.416206