IAWS-Agri Soc. Ltd/Unigrain [1994] IECA 351 (6th September, 1994)

IAWS-Agri Soc. Ltd/Unigrain [1994] IECA 351 (6th September, 1994)

Post-employment non-compete clauses in a sale of business agreement, where the vendor becomes an employee, are part of an agreement between undertakings and offend against section 4(1) if they exceed what is necessary to secure the transfer of goodwill. Restrictions exceeding one year post-employment are not justified and are not indispensable, and thus do not qualify for a licence under section 4(2).

Citation
[1994] IECA 351
Parties
Purchaser: IAWS-Agri Society Limited; Vendor: Ronan Fitzpatrick; Vendor: Michael Farrington; Vendor: Edward Gilmartin Snr.; Vendor: John Farrington; Vendor: Martin Murphy; Vendor: T & J Farrington Limited; Target Company: Unigrain Dublin Limited; Target Company: Unigrain Foynes Limited
Jurisdiction
Ireland
Procedural Posture
Competition Authority Notification Decision / Authority Decision on Certificate/licence Application
Outcome
Refusal of certificate and licence
Legal Topics
Non Compete Clauses, Sale of Business, Agreements Between Undertakings, Post Employment Restrictions
Competition Law Non Compete Clauses Sale of Business Agreements Between Undertakings Post Employment Restrictions

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Parties

IAWS-Agri Society Limited

Purchaser

Ronan Fitzpatrick

Vendor

Michael Farrington

Vendor

Edward Gilmartin Snr.

Vendor

John Farrington

Vendor

Martin Murphy

Vendor

T & J Farrington Limited

Vendor

Unigrain Dublin Limited

Target Company

Unigrain Foynes Limited

Target Company

Procedural Posture

Competition Authority Notification Decision / Authority Decision on Certificate/licence Application

Legal Issues

  1. 1 Whether post-employment non-compete clauses in a sale of business agreement offend against section 4(1) of the Competition Act 1991
  2. 2 Whether such clauses are eligible for a licence under section 4(2)

Ratio Decidendi

Post-employment non-compete clauses in a sale of business agreement, where the vendor becomes an employee, are part of an agreement between undertakings and offend against section 4(1) if they exceed what is necessary to secure the transfer of goodwill. Restrictions exceeding one year post-employment are not justified and are not indispensable, and thus do not qualify for a licence under section 4(2).

Court Disposition

Refusal of certificate and licence

Orders

  • Refusal to issue a certificate or grant a licence to the agreement of 12 January 1989 between IAWS-Agri Society Limited and the Vendors for the purchase and sale of the entire issued share capital of Unigrain Dublin Limited and Unigrain Foynes Limited.