The UK Supreme Court ruled yesterday that UK companies can continue to enforce non-competition employment covenants, or non-compete clauses.

These covenants restrict the activities of staff who become engaged or interested in working for a competitor. These covenants are commonplace for senior executives.

In this case, judges had overturned a previous Court of Appeal decision and formally reinstated an injunction against a former employee of executive search firm Egon Zehnder, Mary-Caroline Tillman, which would have prevented her from taking up employment with a competitor had the contractual period of restraint not since expired.

In January 2017, Tillman left Egon Zehnder and shortly thereafter informed the company that she intended to start work in May 2017 as an employee of a competing executive search firm. However, Egon Zehnder then filed an interim injunction to prevent Tillman from working with the competitor.
Tillman alleged that the restrictive covenant, which prevented her from engaging or being interested in competitors for six months, was too wide and therefore unenforceable. She claimed that the covenant is void under common law because part of it is an unreasonable restraint of trade.The Court said the that the covenants were not an unreasonable restraint of trade and added that if there had been the parts of the covenants that were considered unreasonable then they could have been removed from the contract, which would still make the non-compete clause valid.

Michael Anderson, partner at London law firm Lewis Silkin, told the Financial Times, “Ultimately, the Supreme Court has come down on the side of an employer’s right to enforce reasonable restrictions, even where they may be accompanied by unreasonable ones.”