Business Seating (Renovations) Ltd v Broad
| Jurisdiction | England & Wales |
| Date | 1989 |
| Year | 1989 |
| Court | High Court |
Restraint of Trade - Employment - Salesman - Covenant not to solicit business of any customers of employer or any associated company for one year after termination of employment - Employer in business of renovating office furniture - Associated company manufacturing and selling new office furniture - Whether restriction wider than necessary to protect employer's legitimate interests - Whether covenant severable - Whether enforceable
On 16 February 1987, the defendant was taken on as a sales representative by the plaintiff company, which carried on the business of renovating office furniture and commercial seating. The plaintiff company had an associated company, with the same directors and shareholders, which carried on the business of manufacturing and selling new office furniture and commercial seating. The defendant's contract of employment contained a covenant restraining the defendant for one year after the termination of his employment from canvassing, soliciting or endeavouring to take away from “the company or any associated [company] the business of any customers or clients of the company or any associated [company] who have been customers or clients of the company or any associated [company] during the period of one year immediately preceding the termination of the employment.” On 21 April 1989 the defendant ceased to be employed by the plaintiff company and on 24 April 1989 took up employment with another company, which supplied office furniture and fittings, and whose business covered a wider range of activities than either the plaintiff or its associated company, one per cent. being concerned with re-upholstering and renovating office chairs and other furniture. The plaintiff sought an injunction to restrain the defendant until 21 April 1990 from canvassing, soliciting or endeavouring to take away from the plaintiff company or its associated company the business of any customers or clients of either company who had been such customers or clients within the period of 12 months prior to 21 April 1989.
On the plaintiff's motion for an interlocutory injunction: —
Held, that the covenant was valid in so far as it operated so as of prohibit the defendant's solicitation of customers who were customers of the plaintiff company during the short period of his employment, whether or not he had had any contact with them and whether or not they had discontinued their custom; but that, in so far as it extended to customers of the plaintiff's associated company who were not existing but merely potential customers of the plaintiff, the covenant was void; that, as there was no difficulty, grammatically, in severing the covenant in so far as it related to customers of the plaintiff's associated company, while leaving it unaffected so far as it related to the plaintiff company itself, it was a clear case where severance could be ordered; that, although the nature of the “business,” solicitation of which was prohibited by the covenant, was not expressly defined, it could be inferred from the nature of the defendant's employment, and as a matter of construction, that it meant business of the kind carried on by the relevant company; that, accordingly, the covenant, once severed, was enforceable; and that an interlocutory injunction would be granted, confined to the business of the plaintiff company (post, pp. 733E–H, 734D–F, 735A–B, 736A–E).
The following cases are referred to in the judgment:
American Cyanamid Co. v. Ethicon Ltd. [
Attwood v. Lamont [
Plowman (G. W.) & Son Ltd. v. Ash [
The following additional cases were cited in argument:
Henry Leetham & Sons Ltd. v. Johnstone-White [
Lawrence David Ltd. v. Ashton [
Stenhouse Australia Ltd. v. Phillips [
Motion
By a writ and statement of claim, dated 23 May 1989, the plaintiff, Business Seating (Renovations) Ltd., claimed as against the defendant, Mark Leonard Broad, a former employee, inter alia, an injunction restraining him from (1) disclosing to any person any information as to the practice business dealing or affairs of the plaintiff and/or Business Seating (Manufacturing & Supplies) Ltd. or any of the customers of both or either of them, (2) being directly or indirectly concerned or interested in the business of repairing or renovating office furniture and commercial seating within a three-mile radius of 34/35 Silver Street, Reading, until after 21 April 1990, and (3) canvassing, soliciting, or endeavouring to take away from the plaintiff and/or Business Seating (Manufacturing & Supplies) Ltd. the business of any customers or clients of the plaintiff and/or Business Seating (Manufacturing & Supplies) Ltd. who were clients of the plaintiff and/or Business Seating (Manufacturing & Supplies) Ltd. between 22 April 1988 and 21 April 1989 until after 21 April 1990. The plaintiff by motion sought an interlocutory injunction in terms similar to (3).
The facts are stated in the judgment.
Michael Lerego for the plaintiff.
Geoffrey Stephenson for the defendant.
Millett J. This is an application for an interlocutory injunction to restrain a former employee from soliciting customers...
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