The Court considered continuation of an interim injunction to enforce a post employment restrictive covenant.
Held: Arnold J ruled that the employer had failed to establish legitimate interests which required the protection of the covenant. He therefore declined to continue the injunction; and, apart from adverting to the difficulty of reconciling the decision in the Beckett case with the decision in Tillman, he explained that he had no need to address the issues relating to severance. This final disposal of the application does not however detract from the value of the deputy judge’s observations. In particular he
(a) observed that the deeming provision in the Beckett case could not be regarded as a separate covenant but had nevertheless been severed;
(b) inferred from the Beckett case that the historical reluctance to sever, exemplified in the Mason and Attwood cases, was something of a relic;
(c) recognised on the one hand that an employer had legitimate interests worthy of protection in the public interest; that they might easily be prejudiced when an important employee left; and that they should not be frustrated by too narrow an approach to severability;
(d) recognised on the other hand that Lord Moulton’s concerns in the Mason case remained valid; and that the law should not allow an employer first to extract an unreasonably wide restraining covenant, inhibiting the employee from leaving to work elsewhere and even from threatening to do so in order to obtain fairer terms from him, and then, if challenged in court, too easily to secure its removal and the enforcement of the remainder;
(e) questioned whether Lord Moulton’s concerns were best addressed by a rule which denies severance of a term within a single covenant, even if insignificant; and
(f) concluded that it might be preferable to address substance rather than form and thus to permit the removal of relatively minor terms if it would not materially change the nature of the contract.
Judges:
Arnold J
Citations:
[2019] EWHC 638 (Ch)
Links:
Jurisdiction:
England and Wales
Citing:
Interlocutory Injunction – Freshasia Foods Ltd v Jing Lu ChD 4-Jan-2019
The Court granted an interlocutory injunction by way of enforcement of parts of an employee’s non-solicitation post-employment covenant. Treating the inquiry as purely interlocutory, he made only provisional determinations. These were that three . .
Cited – Tillman v Egon Zehnder Ltd CA 21-Jul-2017
Post employment restrictive covenant – unreasonable restraint of trade – six months restriction – not to become shareholder in a competitor.
Held: The injunction against employment and holding the shares was discharged. The Court rejected the . .
Cited by:
Cited – Tillman v Egon Zehnder Ltd SC 3-Jul-2019
The company appealed from rejection of its contention that its former employee should be restrained from employment by a competitor under a clause in her former employment contract. . .
Lists of cited by and citing cases may be incomplete.
Employment
Updated: 10 April 2022; Ref: scu.634798