Huws Gray Limited v Daniel Gentleman

A post-termination non-compete covenant in an employment contract is enforceable only where it protects a legitimate business interest and goes no further than reasonably necessary. The employer bears the burden of proving this. The covenant must first be construed objectively, applying the natural and ordinary meaning of the words, with commercial context and the validity principle used only where realistically available. The court cannot rewrite an unreasonable restraint. A blue-pencil severance is permissible only where the remaining wording makes independent sense without modifying the contract or materially changing its effect. A restriction which prevents employment with a competitor in any capacity, without adequately protecting the employer’s customer connections or confidential information, is an unlawful restraint of trade. Customer contacts and generally available pricing information are not thereby transformed into confidential property.

Huws Gray Limited employed Daniel Gentleman as an Area Sales Manager under a contract containing a six-month post-termination non-compete covenant, confidentiality provisions and a clause concerning business contacts. Gentleman left to work for MKM Building Supplies, a competitor. Huws Gray obtained interim injunctive relief and brought an expedited claim seeking final restraints against competition and misuse of confidential information.

The issues were the proper construction and enforceability of the non-compete covenant, whether any wording could be severed or corrected, whether the restriction was reasonably necessary to protect legitimate business interests, and whether Gentleman had retained or misused confidential information.

1. Construction of the covenant. The covenant was construed objectively. The ineffective non-solicitation and non-dealing provision elsewhere in the contract was irrelevant to the textual construction of the non-compete clause, although its inclusion was relevant to assessing reasonableness. The Carve-Out was to be read with “and” retaining its ordinary conjunctive meaning. The second “not” produced an irrational grammatical result in context and could be corrected under the limited principle in Chartbrook Ltd v Persimmon Homes Ltd, [2009] UKHL 38. Even after that correction, the Carve-Out had no practical limiting effect because Huws Gray had developed confidential information across its business and Gentleman had been involved in a wide range of related work.
2. Restraint of trade. Applying the staged approach in TFS Derivatives Ltd v Morgan, [2004] EWHC 3181 (QB), Huws Gray had to establish a legitimate protectable interest and show that the covenant was no wider than reasonably necessary. The covenant caught employment by MKM in any capacity, including non-sales and head-office roles, because MKM was a competing business operating within the restricted area. It was not confined to customers with whom Gentleman had meaningful connections or to information he had actually acquired. It therefore restrained competition generally and was void and unenforceable.
3. Duration and territory. Independently, Huws Gray had not satisfactorily answered the reasoning in Quilter Private Client Advisers Limited v Falconer, [2020] EWHC 3294 (QB). It had not shown that a six-month restriction was reasonably necessary where the contract could have ended during probation and Gentleman could not have developed relationships with all relevant customers in that period. The territorial analysis also failed to provide adequate protection for customer connections because Gentleman could operate within the area for an MKM branch situated outside it.
4. Confidential information. Huws Gray failed to prove misuse or a sufficient risk of misuse. Customers were not Huws Gray’s property. Customer contact details were publicly accessible or within Gentleman’s general skill and knowledge. Huws Gray’s best prices and internal authorisation thresholds were not shown to be confidential information of practical value to MKM, particularly as Gentleman lacked direct access to the relevant pricing schedule and did not remember usable thresholds.
5. Disposition. The non-compete injunction had already lapsed. The court would have discharged it had judgment been given earlier. The injunction restraining use and disclosure of confidential information was set aside and discharged, and the claim for final injunctive relief was dismissed.

This was a first-instance decision following an expedited trial. An interim injunction had been granted by HHJ Matthews, sitting as a High Court judge, on 25 February 2026. The non-compete injunction lapsed on 27 May 2026. The present court set aside and discharged the separate confidentiality injunction.