In the case of Coppage and another v Safety Net Security Limited, the Court of Appeal held that a post-termination restriction which prohibited a director from soliciting anyone who was a customer or client at any point during his employment for 6 months after termination was valid and capable of enforcement.
What does this ruling mean?
Whether or not a restrictive covenant is enforceable will depend upon the specific circumstances in a case. In this particular instance, a non-solicitation clause was held to be reasonable (and therefore enforceable) because the purpose of the clause was to place a key employee, who had been the ‘face’ of the business ‘out of bounds’ for a limited period of six months in order to counter the diversion of customers who would have been realistically available to him through his employment.
What action should employers take?
The enforceability of restrictive covenants is a highly specialised area of the law and employers should always seek legal advice on such matters.