The claimant, a trainee inter-dealer broker, had a non-compete clause preventing him from working for competitors within a specified territory for six months after the termination of his employment. The contract also provided that he could be put on garden leave and that if this was for less than three months, it would not be set off against the period of the post-termination restrictions.
Satisfied that a non-compete covenant was necessary, the High Court granted an injunction to enforce it, as the non-solicitation and non-dealing covenants would be difficult to police, and it was disputed what information was confidential. The Court said that if the claimant had been put on garden leave and had then been subject to the non-compete covenant for a total period of nine months, this would not have been unreasonable.
This case illustrates that in certain circumstances, a six month non-compete clause can be enforceable on a relatively junior employee.
Depending on the particular circumstances, there may be scope for a restrictive covenant to be validly imposed after an employee has been on garden leave, thereby extending the period of protection. In assessing whether that is appropriate, the court will consider whether that whole period of restriction goes no further than is necessary to protect the employer’s legitimate business interests.