WRN Ltd. v Ayris

A restrictive covenant in an employment contract must protect a legitimate business interest and go no further than reasonably necessary. A customer non-solicitation or non-dealing covenant is unenforceable if it extends to customers with whom the employee had no personal dealings. The covenant’s reasonableness is assessed when the employment contract is made, not by reference to a later promotion. A six-month restriction may nevertheless be reasonable, and non-solicitation and non-dealing clauses may properly appear together. Business cards collected by an employee for the employer’s business may belong to the employer. Copying business contacts from an employer’s computer may breach a contractual prohibition on copying company documents, even where the information is not confidential.

WRN employed Timothy Ayris from 1999, latterly as Head of Sales and Marketing. He resigned in December 2007 to join a competitor. WRN sought injunctions enforcing post-termination covenants in an employment contract and in a later Leaving Contract.

The Leaving Contract recorded an earlier oral agreement permitting Ayris to leave before expiry of his notice period. The court had to decide whether it was supported by consideration, whether the original covenants were enforceable restraints of trade, and whether Ayris had breached contractual obligations concerning business cards and copied email addresses.

1. The Leaving Contract was unsupported by consideration. WRN had already promised that Ayris could leave on 22 February 2008 and need not work after 8 February. Its promise to perform that existing obligation could not support the later contract. The Leaving Contract was therefore invalid and non-binding.
2. The Relevant Covenants in the Employment Contract were subject to the restraint of trade principles summarised in Office Angels Ltd. v. Rainer-Thomas [1991] IRLR 214. WRN had legitimate interests in protecting customer connections, but the restrictions had to be no wider than reasonably necessary.
3. Reasonableness fell to be assessed at the date of the Employment Contract in September 1999. The court could not justify the covenants by reference to Ayris’s later promotion. Both covenants were unenforceable because they applied to all WRN customers, rather than only customers with whom Ayris had personally dealt.
4. The remaining objections failed. “Negotiating” meant being in active discussion about a specific proposal for supply or provision. “To any material extent” meant to a significant extent. The absence of a geographical limit was not fatal, and an agent was not a customer merely because it acted for a purchaser. A six-month period was reasonable, and non-solicitation and non-dealing covenants could properly be included together.
5. The business cards collected for WRN’s business belonged to WRN and were returnable under the contractual provision concerning company documents. Copying email addresses from WRN’s laptop breached the separate prohibition on copying company documents or computer disks. The court nevertheless found that the relevant information was readily available publicly and was not confidential business information.
6. The claim for an injunction failed. The action was to be dismissed, subject to submissions on costs.