Employers typically devote most of their efforts to come up with new, effectual programmes enabling these to engage and retain their employees and attract talented people from the exogenous environment. It can thus occur that some individuals might decide at some point to leave their organization lured by the apparently most attractive opportunities offered by other organizations.
Under such circumstances, employers are habitually everything but ecstatic. The loss of experienced, knowledgeable professionals, especially of those who have gained a relevant degree of expertise in their professional domain over the years, is in fact highly likely to make a considerable negative impact on an organization. Yet, depending on the activities performed by individuals, their knowledge and use of business-related confidential information, once these have left the organization, usually represent a serious reason for employers concern.
Employers need to
be extremely careful when formulating their contracts of employment, whether
these should include clauses later deemed unreasonable by the Courts, these will
be considered void and as such unproductive of any effect. Yet, it will be up
to the covenantee to persuade the Court that these caveats are reasonable both in
the parties and public interest (Tucker, 2008). The Courts habitually enforce a
restrictive covenant only whether the employer is able to provide evidence of
the circumstance that this actually protects a business interest (as a trade
secret or some confidential information), it is formulated to attain this
objective and extends no further than reasonably necessary to achieve this aim
(Herbert Morris Ltd. v Saxelby, 1916). In order to avert formulating covenants later
deemed void by the Courts on grounds of legality employers should hence, first
and foremost, clearly identify which is the real interest they actually aim at protecting.
These will be thus able to formulate a clause focusing on that interest, to the
extent which is reasonably necessary to protect this (Tyler and
In Thomas v Farr plc and Hanover Park Commercial Ltd (2007), for instance, the managing director had accepted an employment offer from his former employer’s main competitor and sustained that the covenants included in his contract represented an unreasonable limitation of trade and that these were as such unenforceable (Skeaping, 2010). The employer was able to show the Court that the MD had actually access to confidential, strategic information enabling this to quickly design and develop an effective strategy for the new employer, which could have seriously hampered the activity of his business. The High Court and the Court of Appeal respectively held and upheld that the restrictive covenant included in his contract (non-competition clause for twelve months following termination) was reasonable (Skeaping, 2010). Things would have arguably gone differently whether the non-competition clause would have been wider and not limited to the specific sector in which the former employee was actually operating.