PAT Systems v Neilly [2012] EWHC 2609 (QB) (21 June 2012)

PAT Systems v Neilly [2012] EWHC 2609 (QB) (21 June 2012)

Clause 8.1 was unenforceable because, as conceded, it was unreasonable at the time of the original contract in 2000 and was not explicitly re-agreed upon variation in 2005. Therefore, the claimant could not enforce the non-compete covenant, and the summary dismissal was wrongful, entitling the defendant to damages.

Citation
[2012] EWHC 2609
Parties
Claimant: PAT Systems; Defendant: Graeme Neilly
Jurisdiction
England and Wales
Judgment Date
21 June 2012
Procedural Posture
Employment Contract Dispute (restrictive Covenant Enforcement and Counterclaim) / Trial of Liability Issues
Outcome
Claim dismissed; counterclaim allowed
Legal Topics
Restrictive Covenants, Restraint of Trade, Wrongful Dismissal, Non Compete Clauses, Variation of Contract, Summary Dismissal, Counterclaim
Employment Law Contract Law Restrictive Covenants Restraint of Trade Wrongful Dismissal Non Compete Clauses Variation of Contract Summary Dismissal +1 more

Case Brief

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Parties

PAT Systems

Claimant

Graeme Neilly

Defendant

Procedural Posture

Employment Contract Dispute (restrictive Covenant Enforcement and Counterclaim) / Trial of Liability Issues

Legal Issues

  1. 1 Whether clause 8.1 (non-compete) of the employment contract is enforceable against the defendant
  2. 2 Whether the reasonableness of the restrictive covenant is assessed at the date of original contract or variation
  3. 3 Whether the defendant's employment with TT would breach clause 8.1

Ratio Decidendi

Clause 8.1 was unenforceable because, as conceded, it was unreasonable at the time of the original contract in 2000 and was not explicitly re-agreed upon variation in 2005. Therefore, the claimant could not enforce the non-compete covenant, and the summary dismissal was wrongful, entitling the defendant to damages.

Court Disposition

Claim dismissed; counterclaim allowed

Orders

  • Assessment of damages on the counterclaim referred to a Master if not agreed
  • Undertaking as to non-disclosure of confidential information to continue