Supreme Court to rule on enforceability of non-compete restrictive covenant
24 January 2019 #Contracts
Tillman v Egon Zehnder Ltd is due to be heard in the Supreme Court this week, serving as a reminder to employers about how carefully they must word a restrictive covenant.
The wording being examined is in relation to a six-month non-compete clause, which prevented the employee from becoming “concerned or interested in any business carried on in competition” with her employer.
This was found in the Court of Appeal to be too wide, and therefore unenforceable, as it would restrict the employee from even buying shares in a competing company.
Such clauses are a typical feature of employment contracts covering a wide range of occupations. Should the Supreme Court uphold the ruling, it would again highlight the need for employers to ensure that restrictive covenants are tightly suited to the employee’s role and to its protectable interests. It is important to keep these clauses under review and to update them where necessary as people progress through the business.
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