Planon Ltd v Gilligan  EWCA Civ 642
Appeal against the refusal of an application for an order to enforce a non-compete covenant in the contract of employment between Planon Ltd and the ex employee, Mr Gilligan. Appeal dismissed.
Mr Gilligan (R) was employed by Planon Ltd (A) and his contract of employment included various post-termination restrictions (PTRs), one of which prevented him from working for a competitor for 12 months. He did go and work for another firm which A said was a competitor, and had been there for 7 months by the date of this trial. A attempted to enforce the PTR. The key issue for the court was whether the PTR would be an unreasonable restraint of trade and therefore unenforceable. The court did not grant an injunction against R principally because, if the non-compete covenant was enforced, R would not be able to work for the period of the restraint.
The Court of Appeal concluded that the judge took the wrong approach. He did not expressly apply the right test to the enforceability of the non-compete covenant. The principal factor he took into account against the grant of an injunction was that if the non-compete covenant was enforced, R would not be able to work for the period of the restraint. There was no authority which supported that approach. Even R did not argue that this factor was relevant to the enforceability of the covenant. It followed that the Judge's decision on the enforceability of the non-compete covenant could not stand. However, because R had worked for the competitor for 7 months, any damage which his employment may have caused A would already have been done. The judges concluded that it would be contrary to the balance of convenience for the court to enforce the non-compete covenant now.
Published: 31/05/2022 09:56