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Company stops former employee soliciting its clients

Posted: 18th April 2013   In: Business Employment

A company has been granted an interim injunction to prevent a former employee from soliciting its clients.

The case involved an employee who had been a senior manager and associate director of the company. In October 2012, he was told that he was no longer a senior manager but could continue as an associate director. He would keep his salary and receive an enhanced employer pension contribution rate of 4%.

He found this unacceptable and handed in his notice in January 2013. His contract contained a restrictive covenant that prevented him, for six months after termination, from soliciting anyone who had been a client of the company in the preceding 12 months.

The company alleged that shortly after starting a new job, he started to solicit some of its clients, in breach of the covenant. When he refused to give undertakings that he would stop doing so, the company began legal proceedings.

The court held that the covenant did appear to be enforceable as there was no suggestion from the former employee that he had not solicited clients. His defence was based on his belief that the company had breached his terms of employment when it demoted him.

The judge felt this defence was unlikely to succeed at trial. Furthermore, a trial was unlikely to take place until after the period covered in the covenant had ended. It was therefore appropriate to grant an interim injunction preventing the employee from soliciting the company’s clients in breach of the restrictive covenant.

Please contact Sarah Liddiard for more information about the issues raised in this article or any aspect of protecting your business interests.

Posted by: Sarah Liddiard
Corporate Commercial
Luton Office