Frettens Banner Image

News & events

Restrictive covenants

Bartholomews Agri Food v Thornton

In this case the High Court resoundingly rejected the reasonableness of a restrictive covenant in an employment contract on various grounds.

First, the Court ruled that a covenant which was unenforceable when it was first imposed, remains unenforceable regardless of whether the employee is later promoted to a role where it could be regarded as reasonable. In this case, the covenant was in place when the employee first entered the business as a trainee agronomist in 1997. At that time he had no experience or customer base; therefore a non-compete clause which prevented him from working with any of the employer's existing customer base for six-months was manifestly inappropriate and in restraint of trade. On that basis alone, the covenant was unenforceable.

In any event, the Court went further and found that the terms of the covenant were drafted too widely to be unreasonable even after the employee's 20-year career. It sought to prevent the employee from dealing with any customer of the employer regardless of whether he had had any prior dealings with the customer. Given that the employee worked with customers who represented only 2% of the company's overall turnover, it would be manifestly unfair to prevent him from working with customers representing the other 98% of the employer's existing customer base.

In Practice

Employment Associate Paul Burton says, "This case is a timely reminder to employers that, in order to make restrictive covenants enforceable, not only do they have to make sure they are aimed at the right employees, but that they have to ensure they are drafted tight enough to not be a restraint of trade." The Court was not persuaded by an unusual term of the clause which provided that the employer would continue to pay the employee in full during the six-month period. The Court held it would be contrary to public policy to allow an employer to 'purchase' a restraint of trade.

Our Employment Team, based in Christchurch, also cover Bournemouth, Poole and the New Forest. For a free initial chat, please call 01202 499255 and Paul or a member of the team will be happy to discuss any questions that you may have.

The content of this article, blog or video is not intended as specific legal advice. For tailored assistance, please contact a member of our team.

home