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New decision that confirms employers can enforce non-compete clauses in employment contracts

The Supreme Court have ruled that the words ‘or interested’ could be removed from a non-compete clause and by doing so removing the unreasonable effect of the clause and rendering it enforceable.

Adopting the ‘blue pencil test’ in the first instance, the Court considered that the removal of the words 'or interested' meant that the clause maintained its ability to prevent the ex-employee from being engaged or concerned in a competing business, without needing to modify or add to the remaining wording.

The Supreme Court then turned to what they appear to consider the vital criterion – the character of the contract.  The Court determined that the removal of the words 'or interested' did not alter the overall effect of the post-termination obligations in the contract and that the character of the agreement was synonymous with that which the parties had originally entered into.

The employer was granted the injunction on the basis of the amended wording, albeit the relevant period for the non-compete clause had long since expired…

For more information on the article above please contact Stephen Moore.

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