Tom Walker & Richard Marshall explain why some employees may have less waiting time between jobs in future
Over the last year, a series of cases has given useful guidance on the permissible length of covenants seeking to restrict an ex-employee’s client dealings.
Post-termination restraints are void unless the employer can demonstrate a legitimate business interest and show that the wording of the covenant goes no further than what is reasonable. It is accepted that client goodwill is a protectable interest and that relatively short periods of restraint, some six to 12 months, are permissible. The recent case of East England Schools CIC v Palmer and Sugarman [2013] EWHC 4138 (QB) challenged this approach in the context of a school recruitment agency.
An employee with six-month client covenants, Palmer, began to contact her former client schools very soon after joining her new employer, Sugarman. Her former employer, East England Schools (EES), sought an injunction and the matter ultimately came to a full trial to assess the reasonableness of the client covenants. The
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