Winckworth Sherwood

UK 200 2014 position: 81

Twelve-month non-competition restrictive covenant enforceable against financial adviser

Merlin Financial Consultants Ltd v Cooper, concerning 12-month non-competition restrictive covenants, suggests that they are easier to enforce in the financial services sector because of the strong relationships between advisers and clients, which are a particular feature of that industry. The courts seem to be showing greater willingness generally to uphold such clauses, in appropriate circumstances.   

Mr Cooper was a financial adviser (with more than 23 years’ experience) who worked for Merlin Financial Consultants). Mr Cooper entered into an agreement with Merlin under which Merlin paid him £43,200 for the right to receive income from Mr Cooper’s existing client base. This agreement contained covenants that prevented Mr Cooper from competing with Merlin in any capacity for a period of 12 months post employment. Mr Cooper’s separate employment contract contained similar, but more limited, restrictions…

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