The High Court found in Bartholomews Agri Food v Thornton [2016] EWHC 648 (QB) that the reasonableness of an individual’s restrictive covenants will be judged at the point they were entered in to.
Therefore, if a junior employee is signed up to restrictions that are overly restrictive in terms of their breadth and/or their duration then they will simply be void as being in restraint of trade – irrespective of any subsequent promotion.
This means that even if a junior employee is promoted to a higher position where the restrictive covenant is therefore reasonable by the fact that their employment contract had covenants in them which were unreasonably wide may risk the fact that the employer cannot get the benefit of them even when the employee holds a position which would warrant the wider restrictions being in place.
Here the High Court also concluded that the restrictive covenant would have been void even if entered in to when Thornton became a senior employee. It restricted Thornton from undertaking work for any of Bartholomews’ clients regardless of his own dealings with them. On the facts, Thornton worked with just over 1% of the company’s clients (in terms of turnover) but the restriction had no personal nexus (whether that was working for and/or knowledge of the clients). Thus it was a broad, blanket restriction that was unenforceable.
As a reminder: Restrictive covenants are void as restraint of trade other than where they are necessary to protect the legitimate business interests of a company. Restrictions should always be tailored to the individual’s role as at the time they are entered into.
The restrictions should be the minimum necessary for the particular legitimate business interests they are said to protect. However, it is still possible to protect a business with bespoke restrictions – so make sure you seek help in drafting them.
