Addleshaw Goddard

UK 200 2014 position: 22

Judge not entitled to rewrite weak restrictive covenant

The Court of Appeal has overturned a High Court judge’s decision to add words to a non-compete restriction, which had originally offered the employer very little protection. The court held that there was no ambiguity in the drafting of the covenant. Rather, the covenant had been clearly drafted but simply failed to achieve the protection that the employer required. The employer had made a bad bargain and it was not open to the court to rewrite the covenant to improve their position (Prophet plc v Huggett).

Mr Huggett was employed as a sales manager by Prophet, a software developer and supplier for the fresh produce industry. In 2013, Mr Huggett resigned, asking to be released from his notice period. He initially said that he had been offered a role in food manufacturing. However, this was untrue, and he eventually admitted that he had been recruited by K3 Business Solutions, which operated in direct competition with Prophet.

Mr Huggett’s contract with Prophet contained a non-compete covenant, which purported to restrain him for 12 months from working in a role ‘in any area and in connection with any products in, or on, which he/she was involved while employed hereunder’. Read literally, the covenant offered the employer no protection at all since no competitor would be selling Prophet’s products. Rather, they would be selling products that were similar to Prophet’s products…

Click on the link below to read the rest of the Addleshaw Goddard briefing.

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