Employers beware — you make your non-compete bed, you lie in it

In March 2014, the High Court issued an injunction restraining Mr Huggett from being directly involved with any competitive activities for his new employer, K3, for the duration of the 12-month non-compete covenant set out at clause 19 of his employment contract with his former employer, Prophet.

That covenant prevented Huggett from competing ‘in connection with any products in, or on, which he/she was involved while employed hereunder’. So, read literally, it only applied to competitive activity related to Prophet’s products. As neither K3, nor any other firm, would deal in Prophet’s products, the clause gave Prophet no practical protection at all.

The judge concluded that something had clearly ‘gone wrong’ with the drafting and added the words ‘or similar thereto’ to the end of the covenant, so that it applied to more than just Prophet’s products. As the judge also found that Huggett’s non-solicitation and non-dealing covenants did not offer Prophet sufficient protection, and that damages would not be an adequate remedy, he granted Prophet an injunction based on the non-compete covenant…

Click on the link below to read the rest of the Stephenson Harwood briefing.

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