Planon Limited v Gilligan

Planon Limited v Gilligan

The High Court judge erred in his approach to the enforceability of the non-compete covenant by failing to apply the correct legal test, focusing instead on the effect on the employee's ability to work. However, by the time of the appeal, the balance of convenience and the passage of time meant that it would not be appropriate to grant an injunction, as much of any potential damage had already occurred and only a short period of the restraint remained.

Parties
Appellant/claimant: Planon Limited; Respondent/defendant: Gilligan
Jurisdiction
England and Wales
Judgment Date
10 May 2022
Procedural Posture
Civil Appeal / Appeal From High Court Decision on Interim Injunction
Outcome
Appeal dismissed
Legal Topics
Restrictive Covenants, Non Compete Clauses, Interlocutory Injunctions, Restraint of Trade
Employment Law Contract Law Restrictive Covenants Non Compete Clauses Interlocutory Injunctions Restraint of Trade

Case Brief

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Parties

Planon Limited

Appellant/claimant

Gilligan

Respondent/defendant

Procedural Posture

Civil Appeal / Appeal From High Court Decision on Interim Injunction

Legal Issues

  1. 1 Whether the non-compete covenant in the employment contract is enforceable as a reasonable restraint of trade
  2. 2 Whether the High Court judge applied the correct legal test for enforceability of the non-compete covenant
  3. 3 Whether an interlocutory injunction should be granted to enforce the non-compete covenant

Ratio Decidendi

The High Court judge erred in his approach to the enforceability of the non-compete covenant by failing to apply the correct legal test, focusing instead on the effect on the employee's ability to work. However, by the time of the appeal, the balance of convenience and the passage of time meant that it would not be appropriate to grant an injunction, as much of any potential damage had already occurred and only a short period of the restraint remained.

Court Disposition

Appeal dismissed

Orders

  • No injunction to enforce the non-compete covenant is granted
  • Refusal to order disclosure of the respondent's new employment contract is upheld