The employee was a junior inter-dealer broker at Tradition Financial Services. His contract of employment contained six month non-compete and non-solicitation restrictions. These periods were reduced if he spent time on garden leave, but only after three months' garden leave – there was a day for day set off after that.
When he resigned on 1 July, the employee was not placed on garden leave, although his access to clients was restricted. His employment terminated at the end of October 2016. He started working for a competitor, Spectron, on 1 January 2017 (six months after he had given notice) and there was evidence that he was in contact with Tradition's clients from early January. Tradition argued that this was in breach of the non-compete and non-solicitation covenants.
The restrictions were upheld as reasonable and necessary to protect Tradition's interests, with the result that the employee was prevented from working for Spectron until 1 May 2017. Although the decision was fact-specific (as is invariably the case with restrictive covenant claims), the judge made a number of comments of interest:
• Accepted "industry standard" in terms of the length of any restriction was relevant, but not decisive, on the issue of what was reasonable. The evidence showed that a non-compete clause that kept a broker (of whatever experience or seniority) out of the market for six to 12 months was not excessive by the standards of the broking industry.
• The contract envisaged that the employee would be out of the market for a maximum period of nine months (up to three months of garden leave plus the six month non-compete). This was within the spread of time needed to persuade existing clients to remain loyal and to recruit a replacement. The fact that the whole period of garden leave was not offset against the period of the restriction did not make the clause invalid.
• The non-compete clause was not too wide to be enforceable. Although it prevented the employee from being "interested in any capacity in … any business activity", this could not be interpreted as precluding the employee from having a small shareholding in a competing business. There was a clause in the employment contract expressly dealing with small shareholdings in other businesses and it could not sensibly be intended that the post- termination restrictions would be more onerous than those that applied during employment.
• Although the employee signed the contract when a junior broker, he was nevertheless well-qualified and had taken a decision to come to London from Italy to advance his career. He was aware of the terms of the contract and was not vulnerable or in a weak negotiating position.
Even though the Court had found that the covenants were reasonable, it still had a discretion to allow the employee to start working for Spectron again before 1 May 2017 when the post-termination restriction expired. But it decided not to do so. It was not possible to assess the extent to which Tradition had managed to shore up its client base. The fact that they had recruited a (much less experienced) substitute for the employee did not change the Court's decision.