TFS Derivatives Led v Morgan [2004] EWHC 3181 (QB) (15 November 2004)

TFS Derivatives Led v Morgan [2004] EWHC 3181 (QB) (15 November 2004)

Clause 12.1(a) is enforceable as a restriction on the defendant's involvement in the specific business activity in which he was engaged (DAX broking), but the words 'or similar to' are unreasonably wide and unjustified. These words can be severed, leaving the remainder of the clause valid and enforceable. The restriction is reasonable in scope, duration, and necessary to protect TFS's legitimate business interests.

Citation
[2004] EWHC 3181
Parties
Claimant: TFS Derivatives Limited; Defendant: Simon Morgan
Jurisdiction
England and Wales
Judgment Date
15 November 2004
Procedural Posture
Employment Contract Dispute / Final Judgment After Expedited Trial
Outcome
Claimant succeeds in part
Legal Topics
Restrictive Covenants, Restraint of Trade, Post Termination Restrictions, Injunctions
Employment Law Contract Law Restrictive Covenants Restraint of Trade Post Termination Restrictions Injunctions

Case Brief

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Parties

TFS Derivatives Limited

Claimant

Simon Morgan

Defendant

Procedural Posture

Employment Contract Dispute / Final Judgment After Expedited Trial

Legal Issues

  1. 1 Whether clause 12.1(a) of the defendant's employment contract is void as an unlawful restraint of trade
  2. 2 Proper construction of the restrictive covenant in clause 12.1(a)
  3. 3 Whether the words 'or similar to' render the clause unenforceable

Ratio Decidendi

Clause 12.1(a) is enforceable as a restriction on the defendant's involvement in the specific business activity in which he was engaged (DAX broking), but the words 'or similar to' are unreasonably wide and unjustified. These words can be severed, leaving the remainder of the clause valid and enforceable. The restriction is reasonable in scope, duration, and necessary to protect TFS's legitimate business interests.

Court Disposition

Claimant succeeds in part

Orders

  • Clause 12.1(a), (b), and (c) are enforceable with the words 'or similar to' severed from each sub-clause.
  • Injunction granted restraining the defendant from engaging in competitive business activity as defined, until 22 December 2004.