“If it will not be possible to hold a trial before the period for which the plaintiff claims to be entitled to an injunction has expired, or substantially expired, it seems to me that justice requires some consideration as to whether the plaintiff would be likely to succeed at trial. In those circumstances it is not enough to decide merely that there is a serious issue to be tried.”
“… A recently departed employee will know which clients are the most profitable overall and which provide the most business. This is clearly highly confidential information which again should not fairly be accessible to a competitor from a former employee. Such information allows the employee to target particularly good clients and, in combination with confidential information on margins, focus their efforts on undercutting us with our key customers.”
“It is the nature of foreign exchange business that most customers trade frequently, making one-off deals on a weekly, fortnightly or monthly basis. A smaller number of clients, those with fewer currency exchange requirements, can trade once every two months or so. The exception would be when a customer makes a forward buying or forward selling contract. A forward contract involves a payment at a future date, or a series of payments throughout the term of the contract, and although this is still a single deal, there will be regular contacts with the customer throughout the contract term as they draw down or make payments against the contract. The term of most forward contracts is four months or less. In addition, customers do not commit to doing more than one deal at a time with any given broker or brokerage – and certainly, there are no contractual obligations requiring them to do so. In my experience, customers understand that the foreign exchange market is highly competitive and that, in order to get the best deal for themselves, they are free to negotiate with and use whichever broker they wish for any given transaction.”
“All businesses hope to retain their customers over a 12-month period (in fact IFX aims to retain its customers for far longer than that). However, customers have no obligation to use or retain any particular broker for any given trade. They can – and frequently do – shop around amongst foreign exchange brokers before making a transaction, so any broker wishing to compete needs to offer a similarly inclusive and attractive package of services above and beyond the ability to offer a preferable rate of exchange.”
“The court can exercise its discretion in deciding the permissible length of garden leave but, if the restrictive covenant is valid, the employer is entitled to have it enforced, subject to all the usual grounds on which an injunction may be withheld, such as delay and a finding that damages would be an adequate remedy in the circumstances. Moreover, it is to be remembered that the existence of a garden leave clause may be a factor to be taken into account in determining the validity of a restrictive covenant as at the date of the contract. I would, however, add a caveat. Terms which operate in restraint of trade raise questions of public policy. The opportunity for an individual to maintain and exercise his skills is a matter of general concern. I would therefore leave open the possibility that in an exceptional case where a long period of garden leave had already elapsed, perhaps substantially in excess of a year, without any curtailment by the court, the court would decline to grant any further protection based on a restrictive covenant. But that is not this case.”
“37. Firstly, the court must decide what the covenant means when properly construed. Secondly, the court will consider whether the former employers have shown on the evidence that they have legitimate business interests requiring protection in relation to the employee's employment. In this case, as will be seen later on, the defendant concedes that TFS have demonstrated on the evidence legitimate business interests to protect in respect of customer connection, confidential information and the integrity or stability of the workforce, although the extent of the confidential information is in dispute in relation to its shelf life and/or the extent to which it is either memorable or portable. 38. Thirdly, once the existence of legitimate protectable interests has been established, the covenant must be shown to be no wider than is reasonably necessary for the protection of those interests. Reasonable necessity is to be assessed from the perspective of reasonable persons in the position of the parties as at the date of the contract, having regard to the contractual provisions as a whole and to the factual matrix to which the contract would then realistically have been expected to apply. 39. Even if the covenant is held to be reasonable, the court will then finally decide whether, as a matter of discretion, the injunctive relief sought should in all the circumstances be granted, having regard, amongst other things, to its reasonableness as at the time of trial. 40. If a restrictive covenant applying after employment has terminated is held to be unreasonable, then it is void and unenforceable. The court cannot read down such a clause in an effort to render it reasonable and enforceable. In certain circumstances, however, if only a discrete phrase within a particular covenant is held to be unreasonable, individual words or phrases may be “blue-pencilled” or severed, provided that what is left makes independent sense without the need to modify the wording and that the sense of the contract is not changed. I shall consider this issue in greater detail below.”
“It seems clear that the judge considered that the complete protection for 12 months afforded by the garden clause was unnecessary but that some protection for this period was appropriate. He therefore enforced the more limited protection in the restrictive covenants. I consider that on the facts of this case the judge was entitled to reach the conclusion that he did. It may be that another court might have taken a different view and have concluded that a total period of protection of six months was sufficient. But I can see no error of principle in the judge's approach and I do not consider that he was plainly wrong. …”
“We obviously discussed his existing customers, many of whom were longstanding friends of his. However, the offer IFX made to him was not conditional in any way upon him bringing customers with him. We particularly needed an experienced broker to develop certain new strategies we wanted to follow.”
“Whilst I felt I was entitled to speak to my old customers and do business for them at IFX if that is what they wanted me to do, I was not encouraged to do so by IFX. We also discussed the 6-month nondealing clause but I have to say I did not really understand what it meant and soon forgot about it and why it was different from the nonsolicitation clause.”