What does this mean?
The covenant was upheld because the employer was able to show that it had a legitimate interest to protect and that the restraining covenant was no wider than reasonably necessary to protect that interest. The covenant was in line with the employee’s expectations when he joined the company as it was similar to a covenant contained in the contract he had with his previous employer which he had observed after taking legal advice. A 12 month period, the Court said, was common in the industry in which the employee worked and reasonable in that context. The purpose of the 12 month period was to give time for a relationship to be built up between the company’s clients and the employee’s replacement. The Court did, however, say that a longer restriction would not have been enforceable.
What should employers do?
Employers should be aware that they’ll have to justify the point and extent of any restrictive covenants if they need to enforce them. They may need legal advice on the drafting of any such covenants.
Case reference: Romero Insurance Brokers Limited v Templeton and another
If you want help on this or any other employment law issue please call Russell Jones or the employment team on 01623 451111