Latest in Employment Law>Case Law>Net Affinity Limited v Conaghan and others [2012]
Net Affinity Limited v Conaghan and others [2012]
Published on: 01/12/2015
Issues Covered: Contracts of Employment
Article Authors The main content of this article was provided by the following authors.
Deirdre Crowley
Deirdre Crowley
Background

In this case His Honour Justice Dunne remarked as follows:

“the clause at issue in this case is far too wide to protect the legitimate requirements of Net Affinity. It is a clause which does in fact prohibit all competition by Ms Conaghan in the area of services provided by Net Affinity. As has been made clear in the judgment of Clarke, J in the case of Murgitroyd and Company Limited v Purdy such a clause is too wide. In those circumstances, I have come to the conclusion that the non-compete clause is void and unenforceable.”

In Net Affinity, the employer applied to the Court for an injunction to prevent Ms Conaghan from taking up employment with a competitor. In granting only part of the application to Net Affinity, the Court said that it was satisfied that an injunction preventing Ms Conaghan from taking up employment with a competitor would go further than was reasonably necessary in order to protect the Plaintiff’s legitimate business interests. The Court went on to grant part of the relief sought by restricting the Defendant from approaching or soliciting existing customers of the Plaintiff for 12 months. The restriction was interestingly also applied against the new employer. An injunction was further granted preventing the Defendant from breaching the terms of the confidentiality clause contained in her contract.

A valuable lesson to learn from this case are that while a non-compete clauses can be deemed to be void and unenforceable; it does not necessarily undermine the efficacy of the remainder of the contract. Where the contract includes a severability clause, the non-compete clause can simply be severed from the employee’s contract of employment and the remainder of the clauses survive. While this is not an ideal result, it is some comfort to employers that where they demonstrate a legitimate commercial need for certain information to be protected, then where the facts allow, the Court will protect that need. That said, to learn from the Net Affinity case, an employer is best advised to review all contracts of employment from the point of view of the suitability of their restraint of trade, confidentiality and non-solicitation clauses.

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 01/12/2015