In the recent decision of Thomas v Farr, the Court of Appeal held that a 12-month non-compete clause was enforceable.
Farr is an insurance broker that specialises in providing services for the social housing market. Mr Thomas was Farr’s managing director until he resigned and sought to start working for a newly established competitor. Somewhat unusually, this was an application by Thomas for a declaration that a non-compete clause contained in his service contract, which prevented him from working for a competitor for a 12-month period, was unenforceable, rather than an application by Farr for an injunction to enforce the restrictive covenants in Thomas’ service contract. This meant the decision dealt purely with whether the non-compete clause was enforceable as a matter of principle. There was no need to address the issue of whether it was appropriate to grant injunctive relief.
