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7th April, 2014

Non-competition restrictive covenant held enforceable notwithstanding drafting error


In the recent case of Prophet plc v Huggett [2014] EWHC 615 (Ch), the High Court considered the intentions of the parties to find that a poorly drafted restrictive covenant was enforceable, despite a drafting error.

The 12-month restriction was intended to prevent H from competing with, or working for, a competitor of P. H’s contract of employment defined competition as the provision of computer software systems for the fresh produce industry, produced by P.

Realistically, a competitor would never provide software which was produced by P therefore, on a literal reading, the restriction offered no protection to P whatsoever. Nevertheless, when H left his employment and began working for a competitor, P sought to enforce the restriction.

The High Court rejected H’s argument that the restriction correctly conveyed what it intended to and inserted three words into the restriction (“produced by P, or similar thereto”) in order that P’s intentions could be correctly reflected, and the appropriate protection provided by the restriction.

On the basis of the additional wording inserted into the restriction, the High Court granted P an injunction.

This case has highlighted how the court can exercise discretion to add words into restrictive covenants in favour of the employer. However, you should bear in mind that a court can also remove words and this is more likely to not be in the best interests of the employer. In order to ensure your business is protected from previous employees, we recommend instructing a specialist employment lawyer to properly draft enforceable restrictive covenants.

 



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