Norbrook Laboratories (GB) Ltd v Adair & Anor

A post-termination restraint is enforceable only to the extent that it protects a legitimate business interest and goes no further than reasonably necessary, assessed when the covenant was made. Confidential customer information, pricing and sales strategy, together with customer connections, may justify restraints. A non-competition covenant may extend beyond the employee’s former job where confidential information could be misused in another capacity. However, a restriction defined by products with which a salesperson had any connection during five years was too wide. A non-solicitation covenant was enforceable after severance of uncertain wording and the reference to prospective customers, but not insofar as it covered customers with whom the employee had no personal connection and whose specific information she was unlikely to recall.

Norbrook sought permanent injunctions against its former Territory Manager, Rebecca Adair, and her prospective employer, Pfizer. It relied on a confidentiality agreement and contractual restraints preventing employment in a restricted pharmaceutical business and solicitation or dealing with customers.

Ms Adair accepted the confidentiality obligation but argued that the restraints were unreasonable, excessive in geographical and temporal scope, and wider than necessary to protect Norbrook’s interests. The central questions were whether the covenants were enforceable, whether parts could be severed, and whether injunctive relief should nevertheless be refused.

1. Clause 6.1(a). The covenant was construed as restricting employment in the United Kingdom and Ireland in a business competing through products with which the employee had been concerned in the course of her employment. The phrase “concerned” did not require a particular degree of involvement.
2. Norbrook had legitimate interests in confidential customer information, pricing and discount information, sales movements, sales strategies, product comparisons and customer connections. Information concerning other territories remained capable of protection where it was confidential and had been disseminated for sales purposes.
3. The reasonableness of the restraint was assessed when the contract was made. Salary, age, seniority and length of service were relevant contractual or factual matters, but the salary did not warrant particular significance. A one-year period was reasonable because customer commitments were commonly renewed annually.
4. A non-competition restraint was not necessarily excessive merely because it prevented employment by a competitor in a different capacity. The risk of disclosure of confidential information justified that scope. Nevertheless, Clause 6.1(a) was void in unreasonable restraint of trade. Its five-year product criterion could capture products with which a salesperson had only a tenuous or stale connection and was not apt to protect Norbrook’s interests.
5. Clause 6.1(b). “Direct access to” was too uncertain and was deleted. The reference to prospective customers was also severed. The remaining restraint against soliciting or transacting business with former customers with whom Ms Adair had dealings was valid.
6. The separate limb covering customers whose information Ms Adair had accessed was unenforceable. It extended to customers outside her territory with whom she had no personal connection and whose specific information she had no reason to remember.
7. Injunctions were granted for one year from 7 December 2007 against Ms Adair in the severed terms. Pfizer was restrained from inducing breaches of the enforceable customer restraint and confidentiality agreement.

First instance decision. No prior appellate decision is stated in the judgment.