Case law: confidentiality and non-competition clauses

Employers will be encouraged by a recent decision upholding a confidentiality agreement and non-competition clause contained in an employee's contract of employment.

The employee left a company where he had access to confidential information, and was bound by a confidentiality agreement and a non-competition clause which prevented him from working for five named competitors for six months. The employee was prepared to undertake to the court that he would not breach the duty of confidentiality, but he strongly opposed the order seeking to restrain him from working for one of the competitors for six months.

The High Court found that there was a real risk that the employee might breach the duty of confidentiality towards his former employer, even if the breach occurred inadvertently, and the period of restraint was reasonable. The court, therefore granted an interim injunction that restrained the employee from working for the new company until the issue could be finally determined.

This case highlights the value of drafting confidentiality and non-competition clauses with care, and in reasonable terms.

Immediate