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Repeating restrictive covenant in undertaking
In Capgemini India Private Limited and another v Krishnan and others, the High Court has refused the employer’s application for an interim injunction where employees had given undertakings to observe a restrictive covenant which they subsequently tried to argue was in restraint of trade and unenforceable. In doing so, the Court considered the two conflicting public policy points: one of which was the effect of a restraint of trade, and the other was that the terms on which a dispute is settled should be respected. It took into account Court of Appeal guidance that the terms of an agreement to settle a dispute could nonetheless be challenged but considered it was not for the party who relied on the agreement to prove it was reasonable but for the party seeking to avoid it to prove the particular grounds that justified it being set aside.
On the facts of the case the Court considered that damages would be an adequate remedy since the employer had only put forward vague and tenuous arguments for the loss it would suffer if the interim injunction was not granted, and the arguments as to why damages were not an adequate remedy did not convince the Court.
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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