Wide Non-Solicitation Covenant Enforced
A non-solicitation covenant has been found to be reasonable, even though it was not limited to customers the employee had dealt with directly during a specified period before termination.
In Safetynet Security Ltd v Coppage , C was Business Development Director of a small business providing security services. He joined the business in 2008, had a prominent role and was known by most of its customers, all of whom he had contact with. There were 94 customers in total. Many of the customers saw him as the “face” of the business. His contract contained a six month non-solicitation provision preventing him approaching any individual or organisation who during his employment had been a customer of the company if the purpose was to solicit business which could have been undertaken by the company.
The High Court held that the restriction was enforceable. It rejected an argument that the clause should have been limited to customers with whom he had dealings during the last 12 months of his employment. C played a large role in the company and as the “face” of the Company he was readily identifiable with the goodwill built up within the Company’s database. He had also had contact with all of the Company’s customers. The clause was therefore reasonable and enforceable.
Whilst we would normally recommend that non-solicitation provisions are limited to customers with whom an employee has dealt during a specified period prior to termination, this case demonstrates that in companies with a small client base where an employee has contact with all the customers a more widely drafted covenant may still be upheld as reasonable.
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