August 21, 2014

Restrictive covenant could not be rewritten by judiciary

The Court of Appeal, while agreeing that the covenant, as drafted in the contract, had no useful effect, nonetheless took the view that the wording of the clause was exactly what the draftsman intended. What went wrong was that the draftsman did not think through to what extent the restriction on competition would achieve any practical benefit to the employer if the employee departed to rival company. Ordinarily the Court would favour an interpretation which would achieve a commercial common sense approach, over one which would give rise to an apparent absurdity. However it held that this situation did not fall within that ambit because it was clear what the draftsman had intended. Consequently the injunction was discharged.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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