A post-termination restriction on an employment was in restraint of trade and ineffective despite a payment having been made for the restriction. The agent was not entitled to any commission after termination under the relevant clause.
Mr Jonathan Sumption QC said: ‘I do not think that there can be any doubt that proviso (i) is a restraint of trade. It had been well established since the decision of the Court of Appeal in Wyatt v Kreglinger and Fernau [1933] 1 K.B. 793 that there is no relevant difference between a contract that a person will not carry on a particular trade and a contract that if he does not do so he will receive some benefit to which he would not otherwise be entitled. Proviso (i) is a financial incentive to the agent not to carry on business in the specified fields. It is therefore unlawful unless it is justified as being reasonable in the interests of the parties and in that of the public.’
Judges:
Jonathan Sumption QC
Citations:
Times 10-Jul-1995, [1995] 1 WLR 1461, [1996] IRLR 20
Jurisdiction:
England and Wales
Citing:
Cited – Wyatt v Kreglinger and Fernau CA 1933
An employer agreed to grant the employee a gratuitous pension payable by monthly instalments upon retirement on condition that he did not compete with the employer.
Held: When considering whether a provision operates in restraint of trade, . .
Cited by:
Appeal from – NM Financial Management Limited v Marshall CA 13-Mar-1997
The court considered a provision that a commission agent would be paid commission following the termination of his agency provided that he did not within a year become an independent intermediary or work for a competitor. Here the suspension of . .
Cited – Futter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .
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.83435
