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

art
  • 01 September 2026

Orwins Continues Growth with Investment in Milners and Acquisition of Roe Lawyers

Clarkslegal is pleased to share the news that Orwins, the legal services group we joined earlier this year, has announced a significant investment in Yorkshire law firm Milners and the acquisition of London-based specialist practice Roe Lawyers.

Pub
  • 28 August 2026
  • Immigration

Right to Work and Sponsor Licence Changes 2026: Key dates for businesses

In this podcast, immigration solicitors Ruth Karimatsenga and Monica Mastropasqua discuss the key immigration compliance changes coming into force in September and October 2026 and what employers, HR teams, sponsors and individuals should do to prepare.

art
  • 28 August 2026
  • Commercial Real Estate

Modernising security of tenure: The Law Commission’s follow up consultation paper

On 16th June 2026, the Commission published its second consultation paper: Business Tenancies: the right to renew – modernising security of tenure.

Pub
  • 27 August 2026
  • Litigation and dispute resolution

The Highly Expedited Arbitration Provisions – ICC Rules 2026 – Factsheet

This factsheet provides an overview of the ICC’s Highly Expedited Arbitration Provisions (HEAP), outlining some of the key procedural features introduced by Appendix VI of the 2026 Rules and the potential benefits of this new expedited process.

art
  • 27 August 2026
  • Corporate and M&A

EMIs – April 2026 changes explained

On 6 April 2026 the Enterprise Management Incentive scheme (EMI) was expanded to make EMIs accessible to a wider range of businesses.

art
  • 19 August 2026
  • Employment

Managing employee redundancies: Frequently asked questions (FAQs)

Redundancy should be an employer’s last option when restructuring their business. There are necessary steps that should be taken to ensure that redundancy is the best move forward