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Employment Law > Restraint of Trade Clauses > Flashcards

Restraint of Trade Clauses Flashcards

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1
Q

Introduction

A

James Holland and Stuart Burnett
Jack Allen v Smith 1999
Dairy Crest Ltd v Pigott 1989

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2
Q

James Holland and Stuart Burnett

A

A restraint of trade clause is a clause which can be found in a contract of employment designed to ‘stifle competition away from ex-employees.’

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3
Q

Jack Allen v Smith 1999

A

When considering the validity of a restraint clause, the courts need to look into its reasonableness in terms of market, time, area covered and public policy

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4
Q

Dairy Crest Ltd v Pigott (1989)

A

each case shall be treated based on its facts when assessing reasonableness

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5
Q

Protection from disclosure of information

A

Foster v Suggett (1919)
Faccenda Chicken v Fowler
Thomas v Farr plc

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6
Q

Foster v Suggett (1919)

A

The court held that particular knowledge of secret glass-making process is worth protecting.

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7
Q

Faccenda Chicken v Fowler

A

Confidential information is implied in the contract

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8
Q

Thomas v Farr plc

A

The greater the confidential information to which the employee has access to, the greater the likelihood of the clause to be reasonable and enforceable.

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9
Q

Protection from making use of trade connections

A 
Wallace Bogan v Cove (1997)
CoA in Dawnway v De Braconier d'Alpen
Bell J in SBJ Stephenson v Mandy
M&S Drapers v Reynolds
Hannover Insurance v Schapiro
Fitch v Dewes
Jessel MR in Middleton v Brown
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10
Q

Wallace Bogan v Cove (1997)

A

There must be a clear connection between the employer and the client

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11
Q

Court of Appeal in Dawnway v De Braconier d’Alpen

A

An employer has the right of maintaining a stable workforce within limits of reasonableness

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12
Q

Bell J in SBJ Stephenson v Mandy

A

Bell J allowed a clause protecting the employer from poaching his staff as this was an insurance company, and the employees represented the prime assets of the company.

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13
Q

M&S Drapers v Reynolds

A

the CoA held that clients brought to the company by an ex-employee still belong to him.

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14
Q

Hannover Insurance v Schapiro

A

the court held that the clients brought by an ex-employee still belonged to the company

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15
Q

Jessel MR in Middleton v Brown

A

The duration of the restraint should be limited to the time it takes for a replacement employee to demonstrate his effectiveness.

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16
Q

Fitch v Dewes

A

Relaxed attitude in case of lengthy clauses for trade connections

17
Q

Area covered

A

Littlewoods v Harris
Underwater v Street (1968)
Turner v Commonwealth Minerals
Allan Jones LLP v Jahall

18
Q

Littlewoods v Harris

A

The court has allowed a clause restraining a person working within the UK for 1 year + the court stated that the clause should refer to named competitors and specific areas

19
Q

Underwater v Street (1968)

A

The Court has allowed a worldwide clause for 3 years

20
Q

CoA in Turner v Commonwealth Minerals

A

The court stated that only clauses containing areas in which the employee worked can be valid.

21
Q

Allan Jones LLP v Jayhall

A

The restraining clause should not be exagerated and it should merely protect the employer’s interest.

22
Q

Public Policy

A

Herbert Morris v Saxelberg

Allied Dunbar v Weisenger

23
Q

Herbert Morris v Saxelberg

A

The employee should prove that the clause is against public policy

24
Q

Allied Dunbar v Weisenger

A

The test is not based on balancing interests

25
Q

Blue pencilling and court interpretation

A 
Hollis&Company v Stocks (2000)
CoA in Prophet v Huggett
Sadler v Imperial Life (1988)
Business Seating v Broad
Mont v Mills
Hannover v Schapiro
26
Q

Hollis&Company v Stocks (2000)

A

The courts may, within limitations remove words or sentences from a clause to make it reasonable

27
Q

CoA in Prophet v Huggett

A

It is not up to the court to re-write the contract, even if it leaves the employer with a ‘toothless restrictive covenant.’

28
Q

Sadler v Imperial Life (1988)

A

3 conditions are necessary for severance:

  • the remaining of the clause must make sense
  • the remaining of the clause must be supported by consideration
  • the removal of the provision must not change the contract of employment
29
Q

Termination of contract

A

General Billposting v Atkninson

Rex Stewart v Parker -1988

30
Q

Wrongful dismissal

A

General Billposting v Atkinson

31
Q

Technical breach

A

Rex Stewart v Parker

32
Q

Remedies

A

General Billposting v Atkinson
Evening Standard v Harrison
American Cyanamide v Ethicode

33
Q

General Billposting v Atkinson

A
  • wrongful dismissal removes the restraint of trade clause

- the employee can get damages

34
Q

Evening Standard v Harrison

A

Garden leave

35
Q

American Cyanamide v Ethicon

A

Injunction

Employment Law (2 decks)

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