www.bailii.org/ew/cases/EWHC/QB/2008/978.html

www.bailii.org/ew/cases/EWHC/QB/2008/1080.html

Two recent cases usefully rehearse the law on restrictive covenants and, whilst not breaking new ground, provide useful guidelines for the approach to be adopted when considering the enforceability of restrictive covenants.

In Norbrook Laboratories Limited v (1) Adair (2) Pfizer [2008] EWHC 978 Ms Adair was a sales manager for Norbrook. Her contract contained a non competition restriction for one year and a non solicitation of business restriction for one year. She left to join Pfizer and Norbrook sought to enforce the covenants. Ms Adair argued her salary was to low to justify such lengthy restrictions and the Court disagreed. It found that a non competition restriction for one year was not unreasonable given that Norbrook’s customers had committed to buy products for a period of one year. However, the scope of the business from which she would be precluded from work was too wide, being competing products with which she was ‘concerned’ during the last five years. This was too tenuous a connection and in any event most of the sales related information had a limited shelf life and so the restriction was too wide. The non solicitation of business restriction was upheld subject to blue pencilling the provision referring to customers which she had ‘direct access to’ (too unclear) and ‘prospective customers’ (too uncertain).

In WRN Limited v Ayris [2008] EWHC 1080 the High Court found that non solicitation and non dealing covenants were unreasonably wide because they included customers with whom Mr Ayris had never dealt. The case is useful for the Court’s reiteration on the applicability of covenants to employees whose roles and titles change over the years. The reasonableness of such covenants should be considered at the date of the agreement, not when employment terminates. This should remind employers to ensure covenants are periodically reviewed and kept up to date and when an employee’s job changes, the covenants may need to be replaced with new ones.