Search

How can we help?

Icon

Payments to ex-employee during restrictive covenant period made no difference to enforceability

The recent case of Bartholomews Agri Food v Thornton has provided some useful guidance to employers who wish to rely on restrictive covenants when an employee leaves. Restrictive covenants (for example that prevent an employee from dealing with the employer’s clients, poaching clients or staff of the employer or working for a competitor) can be difficult to enforce, as highlighted in this case.

Mr Thornton had worked for his employer, an agricultural merchant, since he started as a trainee in 1997. His employment contract contained a restrictive covenant that prevented him from engaging in “work, supplying goods or services of a similar nature which compete with the company to the company’s customers, with a trade competitor within the company’s trading area… or on [his] own account without prior approval from the company” for six months after the termination of his employment. Unusually, it also provided that the company would pay him in full during those six months.

Mr Thornton resigned to work for a competitor and the company tried to enforce the restrictive covenant by seeking an interim injunction at the High Court.

To enforce the restriction the company had to show that it had legitimate business interests which required protection and that the restrictive covenant was no wider than was reasonably necessary to protect these interests. The High Court held that the restriction was not enforceable for the following reasons:

  • Restrictive covenants are assessed at the time they are entered into.  At the time the contract was entered into (18 years previously) the employee had been a trainee with no customer contacts, so the restriction was not protecting a legitimate interest. The employee was later promoted to a role where the restriction could have been justified, however, he did not re-enter the restrictive covenant at this point and so it could not be assessed from this stage.

The High Court held that the restriction was not enforceable.

  • The restriction was far wider than was reasonably necessary as it applied to all customers of the company and its associated companies, regardless of whether the employee had had any relationship with them. The employee was only responsible for just over 1% of the company’s turnover and did not deal with 98% of the customers.
  • It made no difference that the company was prepared to continue paying the employee during the period of restriction –  permitting an employer to effectively purchase a restraint of trade is contrary to public policy.

This case reinforces the importance of giving careful thought to the drafting of restrictive covenants and makes clear that making payments during the period covered by the restrictive covenant will not impact enforceability.  In this case, had the employer issued a new contract to the employee on promotion with a restriction that only prevented him from dealing with customers that he had prior dealings with then it may well have been enforceable.

Disclaimer

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

Author profile

Monica Atwal

Managing Partner

View profile

+44 118 960 4605

About this article

Read, listen and watch our latest insights

Pub
  • 30 June 2026
  • Litigation and dispute resolution

Overview of the new ICC Arbitration Rules: Key changes – Episode 1

In this episode, Jack Hobbs (Clarkslegal) and Christopher Howitt (Three Stone) discuss the major updates in the ICC Arbitration Rules 2026 and what they mean for practitioners, clients, and the future of international arbitration.

art
  • 26 June 2026
  • Corporate and M&A

Exit Readiness Consultation: Prepare your business for a successful sale

Take the first step toward a smoother, more profitable business exit. Our Exit Readiness service provides tailored health checks, expert guidance, and a free initial consultation—helping you address potential issues early and maximise your sale value.

art
  • 25 June 2026
  • Immigration

Justice and Home Affairs Committee – Settlement, Citizenship and Integration: What the House of Lords Report Means for Migrants

Discover how the House of Lords report influences UK settlement, citizenship, and integration policies. Learn what it means for migrants and employers.

art
  • 24 June 2026
  • Employment

What are employer’s obligations during a heatwave?

During the summer, employers can come across employee issues relating to the heat and hot weather. How can employers handle hot weather and what are employer obligations during a heatwave?

art
  • 23 June 2026
  • Employment

Pride month and employment law: Ensuring compliance with LGBTQ+ protections

With each Pride month, companies unveil rainbow logos and send office wide emails of solidarity. These gestures are valuable, giving visible demonstrations of support, but only really make a difference if those companies are able to truly say that their policies and practices are inclusive and legally compliant.

art
  • 22 June 2026
  • Commercial Real Estate

Do you need an EPC for lease renewals? Key insights for commercial property owners

When is an EPC required for leases? The non-domestic EPC guidance makes it clear that an EPC is not required on renewal. The Ministry for Housing, Communities and Local Government’s (MHCLG’s) “A guide to energy performance certificates for the construction, sale and let of non-dwellings: Improving the energy efficiency of our buildings”