https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2057

Sunrise Virtual Schools Limited t/a Sunrise Virtual School v Korir t/a Weston Virtual School & 2 others (Cause E1057 of 2025) [2026] KEELRC 2057 (KLR) (10 July 2026) (Ruling) Neutral citation: [2026] KEELRC 2057 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Cause E1057 of 2025 AK Nzei, J July 10, 2026 Between Sunrise Virtual Schools Limited t/a Sunrise Virtual School Claimant and Hussain Kipkemboi Korir t/a Weston Virtual School 1st Respondent Hussain Kipkemboi Korir 2nd Respondent Benjamin Ngulu 3rd Respondent Ruling 1.The Claimant/Applicant sued the Respondents vide a Memorandum of Claim dated 27th October, 2025 seeking the following reliefs:-a.A declaration that registration of a business (the 1st Respondent herein) by the 2nd Respondent engaging in core business as that of the Claimant while the 2nd Respondent was in active employment with the Claimant violated and/or breached the non-compete clause provided in the Consultancy Agreement dated 25th August, 2023.b.A declaration that the 3rd Respondent breached and/or violated the non-compete clause provided in the Consultancy Agreement dated 25th August, 2023 by accepting or taking up employment and/or engagement with the 1st Respondent.c.A Permanent Injunction restraining the Respondent from engaging in the business of offering virtual home schooling or any business that offers the same products as those offered by the Claimant and further restrain the Respondents from soliciting the Claimant’s past and present clients and staff during the non-compete period.d.General damages for breach of the non-compete clauses in the Consultancy Agreements dated 25th August, 2023.e.Exemplary or punitive damages against the 1st and 2nd Respondents.f.Costs of the suit and interest. 2.The suit was filed contemporaneously with an urgent application dated 27th October, 2025; but which the Court did not certify as urgent. 3.Orders sought in the said application, which is now before me for determination, are as follows:-a.Spent.b.Spent.c.That pending the hearing and determination of the suit, the Court be pleased to issue a temporary injunction restraining the Respondents from engaging in the business of offering virtual home school or any business that offers the same products as those offered by the Claimant, and further restrain the Respondents or their agents from enticing, canvasing or soliciting the Claimant’s past and present clients and staff during the non-compete period.d.That costs of the application be provided for. 4.The application sets out on its face the grounds on which it is brought, which grounds are substantially replicated in the supporting affidavit of WILFRED KIAMBI KIUGU sworn on 27th October, 2025. It is deponed in the said supporting affidavit, inter alia:-a.that the 2nd and 3rd Respondents are former consultants of the Claimant, having been engaged in the capacities of Principal and Chief Manager-Quality Assurance respectively, vide Consultancy Agreements dated 25th August, 2023. That the 2nd Respondent was later re-designated as the Operations Manager with the Claimant.b.that the 2nd Respondent was terminated for gross misconduct vide a letter dated 11th September, 2025, while the 3rd Respondent was terminated for absenteeism and other grounds, vide a letter dated 25th July, 2024.c.that the Consultancy Agreements between the Claimant and the 2nd and 3rd Respondents contained non-disclosure, non-compete, and non-circumvent clauses, expressly barring the 2nd and 3rd Respondents from taking up consultancy/employment with another firm or in the same business or in competition with the Claimant for a period of two (2) years upon termination of the respective Consultancy Agreements.d.that in blatant breach and without due regard to the aforesaid non-compete clauses, the 2nd Respondent proceeded to register the 1st Respondent School on 19th March, 2025, during which time he was in active engagement with Claimant.e.that by registering a business name to offer similar services as the Claimant during the pendency of his employment, the 2nd Respondent not only acted mala fide but also demonstrated utmost impunity and lack of respect for the Claimant’s business, and abhorrence to pre-existing contractual obligations with the Claimant.f.that the 1st Respondent is currently engaged in the same core business as the Claimant, and is in direct competition with the Claimant.g.that the 1st Respondent has further recruited and employed the 3rd Respondent as its Head of Implementation.h.that the foregoing acts are in direct breach of the surviving non-compete clauses in the contracts with the Claimant, by whose terms the 2nd and 3rd Respondents are bound.i.that the 2nd and 3rd Respondents are directly engaging with the Claimant’s clients, and are using confidential information for purposes of jeopardizing the Claimant’s relationship with its existing clients. 4.The 3rd Respondent entered appearance on 24th November, 2024, and on the same date, he and the Claimant filed an evenly dated written consent; the effect of which was discontinuation of the Claimant’s suit against the 3rd Respondent. The said consent was adopted by this Court as its order on 2nd December, 2025. The Court’s record shows that the Claimant has since filed an amended Memorandum of Claim, dated 9th January, 2026, striking off the 3rd Claimant’s name from the proceedings herein. 6.In view of the foregoing, the application herein is against the 1st and the 2nd Respondents. 7.The clause of the 2nd Respondent’s consultancy agreement dated 25th August, 2023 which forms the basis of these proceedings, states as follows:-“Non-Disclosure, Non-compete & Non-circumvention:This Clause shall remain in force during the contract period and for a further period of two years after termination/expiry of the consultancy agreement. The consultant shall be legally bound to ensure that he/she; shall not circumvent, block, hinder or compete with company business in anyway, or aid competitors. shall observe ultimate discretion and shall not reveal any trade secrets, business model, clients, strategic partners, codes, business strategy, projects or plans to potential competitors or third parties. shall not take up consultancy/employment with another firm in the same business or in competition with the company. the company shall be at liberty to claim any loss of business deemed lost due to breach of this contract. consultant shall not offer private consultancy services/tutorship to company’s clients.” 8.Save for the use of the term “Consultancy Agreement”, the content, creed and tenor of the aforementioned contract between the Claimant/Applicant and the 2nd Respondent point to a contract of employment. Indeed, both the statement of claim (at paragraph 9 thereof) and the affidavit sworn in support of the application herein (at paragraph 6 thereof) refer to the 2nd Respondent’s relationship with the Claimant/Applicant as an employment relationship. 9.Indeed, the 2nd Respondent’s contract with the Claimant/Applicant has on it the 2nd Respondent’s Staff Number (SHS/C/1037) and position, effective date of contract, job description, reporting, evaluation, gratuity, place of work, working time (8 a.m to 5 p.m Monday to Friday and 8.30 a.m to 1 pm on Saturdays), absence from work and conduct, among other matters. The foregoing are matters that fall within the provisions of Sections 9 and 10 of the Employment Act. The contract therefore presents an employee who was under the employer’s (the Claimant’s) total control. 10.The contractual clause which the Claimant/Applicant seeks to assert and to enforce, which I have set out at paragraph 7 of this Ruling, belongs to what is commonly referred to as non-compete contractual clauses or covenants not to compete. In relation to employment contracts, such clauses are covenants by employees not to engage in the same business as the employer for a stated period of time; particularly after leaving employment. Such covenants extending beyond an employment relationship, also referred to as restraint of trade, must always be reasonable in scope, time and territory. 11.Non-compete contractual clauses are not expressly provided for or regulated under Sections 9 and 10 of the Employment Act 2007. They are governed by Common Law Principles and The Contracts In Restraint of Trade Act (Cap. 24) Laws of Kenya. Section 2 of the said Act provides as follows:-“ 2.Any agreement or contract which contains a provision or covenant whereby a party thereto is restrained from exercising any lawful profession, trade, business or occupation shall not be void only on the ground that the provision or covenant is therein contained:Provided that –i.the High Court shall have power to declare the provision or covenant to be void where the Court is satisfied that, having regard to the nature of the profession, trade, business or occupation concerned and the period of time and the area within which it is expressed to apply, and to all the circumstances of the case, the provision or covenant is not reasonable either in the interest of the parties, in as much as it affords more than adequate protection to the party in whose favour it is imposed against something against which he is entitled to be protected, or in the interest of the public, in as much as the provision or covenant is injurious to the public interest.ii.. . .” 12.Section 3 of the aforesaid Act provides as follows:-“(3)Notwithstanding and in addition to anything contained in Section 2, any such provision or covenant shall be void in any case where an employer terminates the services of an employee in contravention of the terms of the contract of service”. 13.The term “High Court” as used in the foregoing Section, in the context of the case herein, refers to this Court as well, by virtue of Article 162(2)(a) of the Constitution of Kenya 2010. 14.Jurisprudence on restraint of trade contractual clauses in employment contracts can be traced back to the English case of Mitchel – vs – Reynolds [1711] where the Court distinguished between restraints general and restraints particular; and categorically stated that general restraints are all void. The Court further stated that although particular and voluntary restraints with consideration are a good and useful contract; the mischief that may arise to the party (employee) is loss of livelihood, subsistence of his family, and to the public by depriving it of a useful member. 15.The Court (in the Mitchel Case – Supra) further stated that all contracts providing for bare restraint, and no more, must be void. 16.In the present case, the restraint clause is bare. It does not state the territory (geographical location) of restraint and any particular proprietary interest of the Claimant/Applicant which the Clause seeks to protect. The particular nature/model of the Claimant’s business is not specified, and it has not been demonstrated by the Claimant that its business concept/model, whatever its nature, is only attributable to it and not to any other Home-Schooling Institution. Further, it has not been demonstrated that the Claimant was the only company/institution offering Home Schooling prior to registration of the 1st Respondent on 19th March, 2025. It has been deponed on behalf of the Claimant that “the 1st Respondent is currently engaged in the core business as the Claimant and in direct competition with the Claimant”. 17.The Court has not, however, been told the territory/geographical location of the Claimant’s business operations and that of the 1st Respondent’s business operations. A restraint clause, even where found to be reasonable by the Court, cannot be said to cover the entire Republic of Kenya. 18.The Claimant has not demonstrated a legal proprietary interest in the Home-School concept/business model, and has not demonstrated that it originated the same in Kenya. Did the Claimant also pick up the business model/concept from elsewhere? 19.For a restraint in trade clause to be upheld or enforced in by a Court, the Applicant must demonstrate a proprietary interest in the interest that it seeks to protect. Further, the restraint must be reasonable in duration and geographical scope, and must state the specific nature of activities sought to be prohibited. A non-compete clause that is broad, oppressive or prevents an employee from earning a livelihood will be declared void for being contrary to public interest and public policy. 20.The burden of proving reasonableness of a restraint clause/non-compete covenant lies on the employer. Where an employer fails to demonstrate the existence of a particular legitimate proprietary interest deserving protection, the non-compete clause will not be upheld. 21.A non-compete clause that covers an unreasonable period of time post-employment, like 2 years in the present case, is unreasonable. Is the 2nd Respondent expected not to earn a livelihood and his family to be without subsistence for 2 years post-employment by the Claimant.” Not at all. A 2 years restriction period is unreasonable, even where a legitimate proprietary interest is found to exist. 22.Every person has a right to work and to earn a living. The Court stated as follows in the case of Direct Pay Limited – vs – Sharon Tum [2024] KEHC 2114 (KLR):-“ 61.I have perused the award and I find that the allegations are far-fetched since the question the arbitrator was called to determine was whether the respondent in the course of her employment had access to and gained knowledge of certain proprietary business information belonging to the applicant. 62.The Arbitrator found that the right to work is a constitutional right by virtue of the International Labour Organization Treaty; to which Kenya is a party. As such, the applicant’s action in seeking to restrict the Respondent’s engagement to employment are not only unconstitutional, but also unreasonable and unenforceable. . . .” 23.I make a finding that the non-compete clause in the 2nd Respondent’s contract is too general, too wide and non-particular in specifics of any existing proprietary interest; and that the interlocutory injunctive order sought cannot issue based on such clause. Further, the Claimant/Applicant has not demonstrated that it cannot be adequately compensated by an award of damages for the alleged breach if the suit herein succeeds upon trial. The Claimant seeks an award of damages in the main suit. (Giella – vs – Cassman & Co. Ltd [1973] 1 EA 538). 24.In sum, I find no merit in the Notice of Motion dated 27th October, 2025. The same is hereby dismissed. 25.Costs of the application will be in the main cause. 26.Orders accordingly. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 10TH DAY OF JULY 2026AGNES KITIKU NZEIJUDGEOrderThis Ruling has been delivered via Microsoft Teams Online Platform. A signed copy will be availed to each party upon payment of the applicable Court fees.Appearance:Mr. Mutunga for the ClaimantNo appearance for the 1st RespondentNo appearance for the 2nd Respondent