L T Logistics Ltd v Kerridge & Anr (Unreported, 23 March 2017, QBD) Dove J

06 Apr 2017

L brought an application for an interim injunction to enforce restrictive covenants it claimed were binding on a former employee (K), who had left and started employment with a rival business (F). In breach of the terms of those covenants, K had begun to solicit the custom of the clients of L with whom he had dealt on behalf of L and also to try to entice away a senior employee of L to join him in his new business. K asserted that the covenants were not binding on him both because, just prior to leaving the employment of L, he had signed a new contract of employment that did not contain any such covenants and because in any event the covenants were unenforceable for being too wide. Both K and F therefore insisted he was entitled to carry on.

Held, granting the injunction: (1) the test to be applied in a case of this kind, where it was overwhelmingly likely that the covenants would cease to have any effect before the matter could come to trial, even if expedited, was not the usual American Cyanamid test, but rather whether it was more likely than not that the claimant would succeed at trial, as per Silber J in CEF Holdings Ltd v Mundey [2012] EWHC 1524 (QB); (2) the document that K signed just prior to handing in his notice was expressed to form “part of” K’s contract of employment and as such was not an entire and wholly new contract, but rather a document supplementary to his pre-existing contract dating from 2012 and that in consequence the original 2012 contract and the restrictive covenants it contained remained binding on K; (3) even if that was wrong, it was to be implied form the circumstances and the conduct of the parties that both parties intended the original covenants to be incorporated into the new contract (if such it was); (4) the covenants were no wider than was required to protect L and 6 months was not too long a time for the restrictions to remain in place; (5) on the above test it was more likely L would succeed on those issues and so, in the circumstances, with some hesitation due to the fact that a substantial part of the period of restriction had already lapsed, the balance of convenience favoured granting the injunction; (6) the circumstances were not sufficiently exceptional and so in this case it was not appropriate to order K to file and serve affidavit evidence confirming the approaches he had made to such clients and former clients of L; (7) the costs would be reserved to trial.


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