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) of the defendant's contract, when properly construed, restricts the defendant only from engaging in the specific business activity in which he was materially involved at TFS, not from working for a competitor in any capacity. The inclusion of the words 'or similar to' renders the clause unreasonably wide and unenforceable to that extent, but those words can be severed, leaving a valid and enforceable restriction against competition in the relevant business activity for six months.

Citation
[2004] EWHC 3181 (QB)
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; restrictive covenants enforced with modification.
Legal Topics
Restrictive Covenants, Restraint of Trade, Post Termination Restrictions, Injunctive Relief, Employment Contracts
Employment Law Contract Law Restrictive Covenants Restraint of Trade Post Termination Restrictions Injunctive Relief Employment Contracts

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 Whether the restrictive covenants are reasonable and enforceable
  3. 3 Whether the words 'or similar to' in the restrictive covenants render them unenforceable

Ratio Decidendi

Clause 12.1(a) of the defendant's contract, when properly construed, restricts the defendant only from engaging in the specific business activity in which he was materially involved at TFS, not from working for a competitor in any capacity. The inclusion of the words 'or similar to' renders the clause unreasonably wide and unenforceable to that extent, but those words can be severed, leaving a valid and enforceable restriction against competition in the relevant business activity for six months.

Court Disposition

Claimant succeeds in part; restrictive covenants enforced with modification.

Orders

  • The words 'or similar to' are severed from clause 12.1(a), (b), and (c).
  • The defendant is restrained for six months from engaging in business activities competitive with the relevant business within the defined territory.