The issue of a restrictive covenant that resulted in a claim for damages by a former employer, which was then challenged by the ex-employee in question, is the subject of a recent case summarised in Daniel Barnett’s Employment Law Bulletin.
The restrictive covenant stipulated that the ex-employee was prohibited from approaching his former employer’s customers for six months after redundancy. When this was breached, the former employer made a successful claim for damages.
The ex-employee appealed the ruling but the Court of Appeal upheld the decision citing that, as the Bulletin explains, ‘the purpose of the covenant was to place a key employee who was the ‘face’ of the business ‘out of bounds’ for a strictly limited period, to counter the diversion of customers who would have been realistically available to the former employee through his employment.’
Employers often ask us, “Are restrictive covenants enforceable?” It can be difficult to enforce them but this case demonstrates that they can be enforced where the covenants are reasonable in order to protect the legitimate business aims of the employer.
Read the full case summary in full at: Restrictive covenants
