Finance company wins damages against former employee
The employee had originally been a self-employed financial adviser with several clients of his own. When he joined the company, he brought those clients with him in return for a substantial goodwill payment from his new employers.
His contract included a restrictive covenant that prevented him from setting up a rival business within a year of leaving the company.
After four years, the employee decided to leave and set up his own business again. He took his original clients with him.
His employers said this breached the restrictive covenant. They claimed they had lost over £200,000 in revenue because more than 70% of the clients would have stayed with them after the restrictive period ended
The court ruled in favour of the employer. It held that the employee could have been in no doubt that the contract included the restrictive covenant.
It also stated that the restrictive covenant wasn’t unreasonable and was necessary to protect the company’s business interests. The employee was ordered to pay damages.
Please contact Robert Bedford for more information about restrictive covenants or any aspect of protecting your business.