Legends Live Ltd v Harrison

A restraint of trade covenant may protect a producer’s legitimate interest in the reputation, profile and preparatory investment associated with a performer. Enforceability depends on the practical effect of the restriction and the factual matrix in which it was agreed. A covenant confined to preventing work for a direct competitor during one season may be reasonable, even if its wording appears broad and its duration is unusual. Under section 13(3) of the Employment Agencies Act 1973, control means predominant practical control over what the worker does, not merely any significant element of control. An injunction may nevertheless be refused for unreasonable delay where granting it would operate inequitably, particularly if the delay appears designed to cause avoidable harm to third parties or a competitor.

The claimant produced a multi-tribute entertainment show in Blackpool. The defendant, its Michael Jackson performer, declined a further engagement and agreed to perform for a competing multi-tribute show at the Central Pier. His contract contained a 12-month covenant preventing work in other look- or sound-alike shows in Blackpool.

The claimant sought an injunction. The defendant argued that the covenant was unenforceable under the Employment Agencies Act 1973 and the Employment Agencies and Employment Businesses Regulations 2003, was an unreasonable restraint of trade, and should not be enforced because of the claimant’s delay. The central issues were whether the claimant had acted as an employment business, whether the covenant protected a legitimate interest and was reasonably necessary, and whether equitable discretion should prevent an injunction.

1. Statutory defence. The claimant was not acting as an employment business for the purposes of section 13(3) of the Employment Agencies Act 1973. The relevant inquiry is whether predominant practical control over what the performer does has transferred to the recipient. The claimant retained predominant control over the defendant’s performance, including the production, dancers, band, lighting and coordination. The venue’s contractual rights and practical ability to make recommendations or give limited instructions did not alter that conclusion. The defence under the 2003 Regulations therefore failed.
2. Restraint of trade. The covenant protected a legitimate interest. The claimant had invested time and money in developing the defendant’s profile and reputation in Blackpool and was entitled to protect that investment from immediate use by its only direct competitor. The covenant’s practical effect was narrower than its 12-month wording suggested: it prevented multi-tribute work for one competing show during one summer season, while leaving the defendant free to work elsewhere, perform solo, or work in Blackpool outside the claimant’s season.
3. The covenant was therefore reasonable in the particular factual circumstances and enforceable. The court emphasised that a similar covenant might be invalid in different circumstances, particularly given its unusual duration and the vulnerability of performers in general.
4. Equitable discretion. The claimant’s delay after its ultimatum was unreasonable. Although the defendant suffered no relevant prejudice from the delay, an injunction sought promptly could have allowed the competing show to reorganise. By July, an injunction risked harming blameless performers, technicians and other staff and causing serious disruption to the competing venue. The circumstances supported the inference that the injunction was being used partly as a weapon against the competitor. Applying the principles of laches, it was inequitable to grant relief.
5. The claim for an injunction was dismissed. The court stated that it would have granted an interim injunction had the application been made promptly in late March or early April 2016.