A blog about post termination restrictions and agronomists – does that sound familiar?
It might as it was only a few months back that we published a post titled ‘Don’t plant your restrictions too early‘. In which we discussed a case that also concerned post termination restrictions that had been placed on an agronomist. The High Court held then that the covenants were unenforceable because they were drafted too widely and they had been entered into when the employee had been just a trainee starting out in his career. One of the factors that the decision highlighted was that the reasonableness of any restriction had to be considered as at the time that it was entered into and not when it was being enforced.
It is some coincidence that the next key case to consider similar issues concerning post termination restrictions also involved agronomists. There are after all probably no more than 600-700 agronomists employed in the entire UK. Remarkably the case also featured covenants that had been entered into when the agronomists were trainees. It might appear then that the answer would be obvious the post termination restrictions would fail for the same reason as they were entered into at the start of their career. However with post termination restrictions nothing is that straightforward.
James Pickwell and Molly Nicholls had been hired as trainee agronomists in 2009 and 2012 respectively. Some weeks after being given letters which had set out the terms of their employment they had been sent formal contracts. These contracts were much more detailed in relation to the terms and included amongst other things restrictions on dealing or soliciting work from clients for a period of six months following the termination of their employment. Despite signing these agreements they both contested the validity of the restrictions when in 2015 they accepted offers of employment from a competitor of their employer.
The restrictions were challenged not just on the grounds of the employees’ trainee status at the time they were introduced but also on the basis that the introduction of them had not been supported by any ‘consideration’ or benefit from the employer.
Controversially the High Court held that the covenants were enforceable.
The recent decision that restrictions imposed on a trainee agronomist were unreasonable could be distinguished. In that case the covenants had been drafted in terms that were much too wide. In this case they had been reasonably defined. The fact that they were trainees when the restrictions were imposed was not fatal to the enforceability. Maybe it was also a factor that they had been entered into relatively recently rather than there having been an 18 year gap as there had in the previous case.
The argument that there was no consideration was also rejected. Their continued employment and the fact they were introduced to clients so as to progress their career was adequate consideration. Whilst this finding also appeared to be in conflict with a 2015 High Court decision again it was held that the current case could be distinguished. The previous case had involved a senior employee who’s continued employment had not been under any threat whereas in the current case the evidence was that the employment would probably not have continued and there would have been no client introductions had the covenants not been accepted.
The decision highlights how fact sensitive the assessment of restrictive covenants is in practice. What may be regarded as reasonable in one case may not be regarded as reasonable in another even where the facts involved employees in the same profession.