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Helen Ruelle
Director of Local Legal Services | Legal
Jersey
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Helen Ruelle
Director of Local Legal Services
Jersey
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Ogier’s Employment Law team recently represented an employer in an action against two former employees to enforce a restrictive covenant that prevented those employees from working for a competing business for 12 months following the end of their employment.
This is the first occasion that the Royal Court has had to consider specifically a “non-compete” clause which makes this case important not only because the last case on post termination restrictions (in that case a non-solicitation clause) was as long ago as 2000 but also because such clauses are common amongst nearly all contracts of employment, particularly senior contracts.
What is important?
The last point is perhaps the most critical. A distinction will be drawn between general knowledge and a trade secret. Only the latter could be protected and, without sufficient evidence to identify this and separate it out from the employees’ general knowledge and skill, difficulties as to enforceability will arise.
What to consider
Applying to Enforce by Injunction
If an employer looks to apply for an injunction at the commencement of proceedings to enforce the covenant on an interim basis (on the assumption that attempts to seek undertakings from the outgoing employee not to join the competitor in question have been unsuccessful), the employer must produce convincing evidence to demonstrate the existence of the legitimate interest it seeks to protect. An employer will also need to demonstrate clearly why the particular employee joining a competitor represents a risk to that interest.
Collating and presenting the evidence to meet those requirements could prove time consuming and costly (as it would likely involve having to analyse specifically by detailed reference to the experience and role of the employee in question how that employee’s employment with the competitor will present a threat to the employer’s legitimate interest). Therefore making notes made at the time of entering into the covenant could form an important means of limiting this process.
For an employer to be able to make an application for an immediate injunction on an ex-parte basis, it will need to demonstrate a real and present risk to its business that would warrant such an urgent approach and the risk the employer would face in delay. Absent such features, the application would need to be on notice to the employee.
We recommend:
Helen Ruelle
Director of Local Legal Services | Legal
Jersey
Helen Ruelle
Director of Local Legal Services
Jersey
Rachel DeSanges
Head of Employment, Guernsey | Legal
Guernsey, London
Rachel DeSanges
Head of Employment, Guernsey
Guernsey, London
Will Austin-Vautier
Counsel | Legal
Jersey
Will Austin-Vautier
Counsel
Jersey
Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.
This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.
Regulatory information can be found under Legal Notice
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