Case - Bartholomews Agri Food Limited v Michael Thornton

[2016] EWHC 648 (QB), IN THE HIGH COURT OF JUSTICE, QUEENS BENCH DIVISON -
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The High Court held that a restrictive covenant contained in Mr Thornton’s contract was unenforceable.

The Facts

Bartholomews Agri Food Limited (“Bartholomews”) is an agricultural merchant supplying products and services to the agricultural section. Mr Thornton had been employed by Bartholomews since 1997. His role had been to provide Bartholomews’s customers with agronomic advice. On 21 December 2015 he resigned. He intended to start working for another employer Pro Cam UK Ltd on the expiry of his notice period on or about 22 March 2016. Pro Cam UK Ltd is a retailer which supplies its customers with seed from multiple seed producers. Mr Thornton was to have other duties in his new role at Pro Cam UK Ltd, but he would continue to provide agronomic advice to clients.

The Application

Bartholomews applied for an interim injunction to enforce the terms of a restrictive covenant contained in Mr Thornton’s contract of employment. Clause 10.2 of the contract of employment purported to prevent Mr Thornton engaging in work supplying goods and services “of a similar nature” to Bartholomews’s customers for a period of six months immediately following the termination of his employment. Mr Thornton’s position was that Clause 10.2 was unenforceable.

The Court considered that Clause 10.2 was a restraint of trade and unenforceable. It followed that there was no serious issue to be tried. The application for an interim injunction was refused.

Reasons

The Court was persuaded by the fact the term had been originally imposed on Mr Thornton when he started work for Bartholomews as a trainee agronomist in 1997. The term was “manifestly inappropriate” for a junior employee and unenforceable. If it was unenforceable at the time it was agreed, it remained unenforceable regardless of Mr Thornton’s promotion to a role where such a covenant might have been regarded as reasonable.

The Court also considered that the covenant was wider than reasonably necessary to protect Bartholomews’s interests. On the evidence Mr Thornton had been responsible for just over 1% of Bartholomews’s turnover. Clause 10.2 purported to prevent Mr Thornton dealing with all of Bartholomews’s customers. The Court suggested that the covenant might have reasonable if it had referred only to those customers with whom Mr Thornton had himself had dealings for a period of time before leaving his employment. Clause 10.2 however was wider than reasonably necessary.

Finally Clause 10.2 provided for Mr Thornton to be paid during the period the restrictions were in force provided he complied with the restrictions. The Court did not accept that this was a factor which weighed in favour of the enforceability of the restrictions. The effect of such a provision would be to allow an employer to purchase a restraint of trade.

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