Finance broker enforces employee’s non-compete clause

BY MARK ASPIN DIRECTOR AND HEAD OF DISPUTE RESOLUTION

A finance company has successfully enforced a non-compete clause preventing an employee joining a rival firm for six months.

The High Court heard that Julien Leonard had been recruited by Square Global Ltd as a broker in 2015.  He resigned on 11 November 2019.

At that time, he had been in discussions for over seven months with a rival financial-services business about leaving Global. His contract of employment required him to give Global six months’ written notice before leaving.

The contract also contained a “Non-Compete” clause which prevented him, for six months after the termination of his employment, from being involved in any business concern which was in competition with Global.

Global’s case was that Leonard had breached various terms of his contract of employment, including the notice provision.  It sought a declaration that he remained an employee until 11 May 2020, coupled with an order prohibiting him from undertaking competitive employment with a third party while he remained an employee.  It also sought to enforce the non-compete clause.

Leonard claimed he had been constructively dismissed after being subjected to a bullying/aggressive environment, unfairness over the allocation of remuneration and the employer’s failure to deal with his complaints and grievances.

The court found in favour of Global. It held that there was nothing in the evidence to show Leonard had been constructively dismissed.

The non-compete clause was justified and enforceable.

First, the employer had a legitimate interest in protecting its valuable confidential information from commercial use against itself.

Second, the six-month non-compete clause was reasonable and went no further than necessary to protect the employer’s legitimate business interests.

The court ruled that Leonard continued to be an employee at Global and would remain so until the end of his notice period on 11 May 2020. Global was also entitled to an order enforcing the non-compete clause, by prohibiting Leonard from involvement in a business concern in competition against it until 11 November 2020.

If you would like more information about the issues raised in this article or any aspect of employment law please contact the team on 01228 585716.