Posted by Richard Woodman, Partner
On 1 September 2016 Withy King LLP merged with Royds LLP. The trading name for the merged firm is Royds Withy King. All content produced prior to this date will remain in the name of the firms pre-merger.
Restrictive covenants need to be reasonable
A case recently referred to the High Court has highlighted the importance of a properly drafted restrictive covenant.
In Bartholomews Agri Foods Limited v Thornton, a Judge ruled that the company could not enforce the terms of an agreement it had tried to implement many years previously.
There were two main reasons for the covenant being rejected.
The first was that the agricultural merchants had attempted to impose the terms and conditions on Mr Thornton when he joined the firm as a trainee almost 20 years ago.
At the time he had no clients and it wouldn’t have been appropriate to apply these restrictions.
Although the employee had subsequently been promoted through the company’s ranks, it was the original restrictive covenant that his bosses had attempted to rely on.
In addition, the High Court had concerns that the scope of the document was simply too wide. The wording suggested that Mr Thornton should have been prevented from carrying out work for any of the firm’s clients upon his departure, regardless of whether he had had any previous dealings with them. This was deemed wholly unreasonable.
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