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Supply company defends its business against former employees

Posted: 26th July 2016   In: Business Employment, Individual Employment

An agricultural supplies company has succeeded in preventing two of its former employees from dealing with its customers for six months after resigning.

The case involved two employees who joined the company as trainee agronomists. Their contracts of employment included a six-month notice period. There were also covenants stating that for six months after leaving the company, the employees would not have any contact with customers they had dealt with in the 12 month-period before termination.

Both employees left after six years to work for a rival company. They tried to have the covenants declared unenforceable so they could begin their new employment straightaway.

The court dismissed their application. It held that neither of them had previously objected to the terms, despite the six-month notice period and the covenants.

The company could not risk allowing employees to build relationships and goodwill with customers without the protection afforded by the covenants. It conferred valuable benefits on the employees such as providing them with training that enabled career progression and greater remuneration.

The employees represented the company in its dealings with customers, and any goodwill they generated belonged to the company.

The notice period and the restrictions were no wider than was reasonable.

Please contact John Carter if you would like more information about the issues raised in this article or any aspect of employment law.