Two words changed a non-compete clause
A senior employee's contract restricted what she could do after leaving. The dispute reached the UK Supreme Court and turned partly on wording that went further than the employer could reasonably protect.
The clause reached beyond taking a new job
The restriction did not only address work for a competitor. Its wording also prevented the employee from being 'interested in' a competing business, which could include even a small shareholding.
The court examined the exact wording
The Supreme Court treated that part as unreasonably wide. It then considered whether the offending words could be removed while leaving the rest of the covenant enforceable, and concluded that they could in this case.
What to check in your own contract
A familiar heading such as non-compete does not reveal the full effect. Read the activities, businesses, geography, duration and exceptions together.
- Does it cover employment only, or also investments and advisory work?
- How long does the restriction last?
- Which competitors, clients or territory does it cover?
- Is there an express exception for small shareholdings?
Small words can materially widen a restriction. Find the exact activities the clause covers before you decide whether the offer works for you.
Official source
UK Supreme Court · Decision date: 3 July 2019
Tillman v Egon Zehnder Ltd [2019] UKSC 32This story concerns United Kingdom law and is general information, not legal advice. The outcome depended on the specific contract and facts.