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 interests if the evidence shows that a covenant in another form, much less far-reaching and less potentially prejudicial to the covenantor, would have afforded adequate protection.’
The court nevertheless identified a prototype non-solicitation covenant likely to be effective in most cases where there was a need to protect a client connection or a goodwill: ‘At least at first sight, a suitably drafted covenant precluding the defendants, for a reasonable period of time after the termination of their employment, from soliciting or dealing with clients of the plaintiff with whom they had dealt during the period of their employment would appear to have been quite adequate for the plaintiff’s protection in this context.’
Sir Christopher Slade said: ‘The employer’s claim for protection must be based upon the identification of some advantage or asset inherent in the business which can properly be regarded as,in a general sense, his property, and which it would be unjust to allow the employee to appropriate for his own purposes, even though he, the employee, may have contributed to its creation.’
Sir Christopher Slade
 IRLR 215
England and Wales
Cited – Kores 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 . .
Cited – Herbert 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 . .
Cited – Stenhouse 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 . .
Cited – Allan Janes Llp v Johal ChD 23-Feb-2006
The claimant sought to enforce a restrictive covenant against the defendant a former assistant solicitor as to non-competition within a certain distance of the practice for a period of three years. After leaving she had sought to set up partnership . .
Cited – Dentmaster (UK) Limited v Kent CA 2-May-1997
The court was asked as to whether a post-employment non-solicitation restrictive covenant was reasonable.
Held: The covenant was upheld. It extended for a period of twelve months to customers within the last six months with whom the employee . .
Cited – Dawnay, 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, . .
Cited – FSS Travel and Leisure Systems Limited v Johnson and Chauntry Corporation Limited CA 19-Nov-1997
The court considered a covenant said to be in restraint of trade. The employee was a 25 year old computer programmer who had worked entirely upon a computerised booking system for the travel industry.
Held: The employer had failed to identify . .
Cited – Assembly Solutions and Tools Ltd v Mitchell SCS 7-Dec-2007
Cited – Norbrook Laboratories (GB) Ltd v Adair and Another QBD 6-May-2008
The claimants sought a post employment injunction to prevent the defendant revealing confidential materials relating to inventions created during his employment. . .
Cited – WRN Ltd v Ayris QBD 21-May-2008
The claimant sought to enforce post employment contracts against the defendant. One issue was whether or not business cards that had been given to the employee in the course of his employment, as well as cards that were already in his possession and . .
Cited – Kynixa Ltd v Hynes and others QBD 30-Jun-2008
Complaint of breaches of employment contracts and shareholders’ agreements. . .
Cited – Accounting, Secretarial and Personnel Limited T/a ASAP Recruitment v Stuart Hallford SCS 10-Aug-2000
Cited – Thurstan Hoskin and Partners v Jewill Hill and Bennett (A Firm) and others CA 5-Feb-2002
Cited – Axiom Business Computers Ltd v Frederick ScS 20-Nov-2003
Lord Bracadale re-iterated the principles used in assessing whether a proposed employment condition operated as an unlawful restraint on trade: ‘(i) A covenant in restraint of trade is void unless it is reasonable in the interests of the parties and . .
Cited – Beckett Investment Management Group Ltd and others v Hall and others CA 28-Jun-2007
The company sought to enforce restrictive covenants entered into by employees of its subsidiary. The employees said that the covenants did not benefit them.
Held: The court should take a realistic view of corporate identity in such situations. . .
Cited – Greck v Henderson Asia Pacific Equity Partners (Fp) Lp and others SCS 8-Jan-2008
Cited – Seabrokers Ltd v Riddell SCS 15-Aug-2007
Cited – TFS 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 . .
Cited – Leeds Rugby Ltd v Harris and Bradford Bulls Holdings Limited QBD 20-Jul-2005
The claimant sought damages from the defendants saying that the second defendant had induced a breach of contract by the first when he left to play rugby for the second defendant.
Held: The contract could not be said to be void as an agreement . .
Cited – Beckett Investment Management Group Ltd. Beckett Financial Services Ltd. Beckett Asset Management Ltd and others v Hall and others QBD 16-Feb-2007
Cited – Bridgend County Borough Council v Stephens EAT 10-Dec-1999
Cited – Bridgend Borough Council v Sutton EAT 22-Jan-2002
Cited – Watts v Information Commissioner IT 20-Nov-2007
Cited – Duarte v The Black and Decker Corporation and Another QBD 23-Nov-2007
Attempt to enforce restrictive covenant in employment contract. . .
Cited – 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 . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 November 2021; Ref: scu.240032