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Covenants in employees’ contracts unenforceable as being too wide

An employer has failed to stop former employees from working with his customers at their new employer’s, because the court has ruled that the restrictions in the employees’ contracts are too wide and therefore unenforceable.

Employees’ contracts of employment prohibited them, for 12 months after the termination of their employment, from direct or indirect employment by any present or past customer of their employer if the employees had been personally involved with those customers.

A number left to work for a former senior sales manager who had set up his own company to compete with their ex-employer. The ex-employer took them to court.

The court said the prohibition against working with any customer they had been involved with, no matter how long ago that had been or how slight the involvement, was unreasonable, so the clause was unenforceable.

Recommendation

Employers should always ensure such clauses are drafted by a specialist lawyer to ensure they are reasonable and therefore enforceable.

Jonathan Waters is the founder of Helix Law. Before qualifying as a Solicitor he worked in industry and in investment banking for over a decade. He was also the Partner in charge of Commercial Litigation, Employment Law and Property Litigation at Stephen Rimmer LLP. Jonathan has wide experience of helping and advising businesses to avoid or to deal with commercial disputes and in particular construction disputes.

This article is written to raise awareness of the issues it discusses and it may not be updated after it is first written, even if the law changes. It is not intended to be legal advice and cannot be relied on as such. Helix Law is not responsible or liable for any action taken or not taken as a result of  this article. If you think the matters set out affect you and you wish to apply them to your particular circumstances then we are happy to give you free initial telephone advice. 

Contact Helix Law on 01273 761 990 or email: [email protected]