15-05-2008
Enforceability of restricted covenants
The Queens Bench Division has reported this month in the case of Norbrook Laboratories v Rebecca Adair on the enforceability of restricted covenants.
It has long been the case (since 2005) that the reasonableness of a restrictive covenant has to be judged at the time the contract is entered into and not at the time when the restricted covenant is seeking to be enforced.
In this case, the level of the individual’s salary was brought up as supporting the enforceability of a contract. The argument seemed to be that how could someone on a very substantial salary not be covered by these restrictive covenants.
The court ruled that the level of salary was not a consideration when examining the enforceability of the restrictive covenant. The restrictive covenant could be enforced against somebody on a very high wage in the same way as it could against somebody on a very low wage.
The age, seniority and length of service of the employee in this case did not detract from the fact that she was to have access to confidential information and was in a position where she would establish customer connections on behalf of the employer. The company was entitled to protect this information and these connections.
It has long been the case (since 2005) that the reasonableness of a restrictive covenant has to be judged at the time the contract is entered into and not at the time when the restricted covenant is seeking to be enforced.
In this case, the level of the individual’s salary was brought up as supporting the enforceability of a contract. The argument seemed to be that how could someone on a very substantial salary not be covered by these restrictive covenants.
The court ruled that the level of salary was not a consideration when examining the enforceability of the restrictive covenant. The restrictive covenant could be enforced against somebody on a very high wage in the same way as it could against somebody on a very low wage.
The age, seniority and length of service of the employee in this case did not detract from the fact that she was to have access to confidential information and was in a position where she would establish customer connections on behalf of the employer. The company was entitled to protect this information and these connections.
