Sunrise Brokers LLP v Michael Rodgers
In this case the High Court has confirmed an employee can be restrained from working for a competitor during his notice period even when the employer stops paying his salary.
In March 2014, Mr Rodgers left Sunrise, having accepted a position with a competitor commencing in January 2015. His contract contained a 12 months’ notice provision and enforceable restrictive covenants. The contract also provided for garden leave (at Sunrise’s discretion which was not exercised) for a period which would not normally exceed 6 months.
From April 2014, due to unauthorised absence, Sunrise ceased to pay Mr Rodgers’ salary but confirmed that payments would recommence on his return to work. Mr Rodgers claimed that non-payment of salary was a bar to enforcing the restrictive covenants.
The Court held Sunrise had good reason to keep the contract alive, despite non-payment of salary, and granted an injunction to prevent Mr Rodgers working for a competitor during a reduced notice period agreed by Sunrise.
In Practice
This decision has to be right. Mr Rodgers had breached his contract in the first place by not turning up for work. Paul Burton, Employment Associate says, “While the courts are not prepared to order specific performance of an employment contract, the decision affirms they will not permit a wrongdoing employee to disregard protection of the employer’s legitimate business interests.”
At Frettens, all of our solicitors offer a free initial meeting or chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 and Kate or Paul will be happy to discuss it with you.
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