High Court enforces 12-month garden leave provision
The High Court has granted an interim injunction to enforce a garden leave clause in a stockbroker’s employment contract, so as to force him to stay at home for the duration of his 12-month notice period. In making its decision, the court was persuaded that the injunction was a reasonable way of protecting his employer’s legitimate interest in retaining its clients (JM Finn & Co Ltd v Holliday).
The employee, Mr Holliday, worked as an investment adviser for the stockbroking firm, Finn & Co Ltd (Finn). Mr Holliday was ‘embedded’ with clients and had established his own relationships.
In July 2013, after securing employment with another stockbroking firm, Mr Holliday resigned. At the time of his resignation, Finn reminded him that he was contractually obliged to give 12 months’ notice and placed him on garden leave with immediate effect. He was also reminded about his restrictive covenants and was told not to initiate contact with any client, prospective client or investment manager at the firm…
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The past five years have not been easy for Addleshaw Goddard. The firm’s revenue fell 7 per cent from £173.1m to £161.9m between 2008/09 and 2010/11 and despite finances looking up in 2011/12, when Addleshaws reported a 30 per cent increase in net profit, it has shown no notable compound growth in turnover since 2007/08.