Company awarded £50,000 compensation from former director

On behalf of Attwaters Jameson Hill posted in Uncategorised on Thursday, August 14th, 2014

A company has been awarded £50,000 compensation from a former director who breached a restrictive covenant by soliciting its clients within weeks of resigning.

A company has been awarded £50,000 compensation from a former director who breached a restrictive covenant by soliciting its clients within weeks of resigning.

The director had been employed in business development. His employment contract included a clause that said for a period of six months after resigning, he could not approach the company’s customers to solicit business which could be undertaken by the company.

The director resigned following a redundancy consultation during a period of restructuring.

He incorporated his own business on the day he resigned and within two weeks, five of his former company’s customers had switched to him.

The case went to the High Court which held that the non-solicitation clause was reasonable and enforceable. The director was the face of the new business and he had breached the covenant by soliciting his former company’s customers.

He was ordered to pay £50,000 damages.

The Court of Appeal has now upheld that decision. It said the restrictions in the covenant only applied for six months, which was both reasonable and enforceable.

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