Enforceability of Restrictive Coventants: Bartholomews Agri Food Ltd v Thornton [2016] EWHC 648 (QB), [2016] IRLR 432

Bartholomews Agri Food Ltd (“Bartholomews”), an agricultural merchant, applied for an interim injunction to enforce a restrictive covenant and confidentiality clause in Mr Thornton’s employment contract. The High Court (Judge McKenna) dismissed the application, finding that the covenant was manifestly unreasonable; that it was immaterial that Bartholomews would pay Mr Thornton during the period of the covenant; and that there was no evidence Mr Thornton had any of Bartholomews’ confidential information.  

Mr Thornton joined Bartholomews as a trainee agronomist in 1997. His work involved advising customers on such matters as seed choice, fertiliser application, and crop planting and rotation [6]. When he joined the company, Mr Thornton signed a contract which included confidentiality and non-dealing provisions. The latter read:  

Mr Thornton resigned in December 2015, and indicated an intention to join a competitor [7].  

The Judge approached the application on American Cyanamid principles. Bartholomews’ case fell at the first hurdle of whether there was a serious issue to be tried.

The Judge observed that interpretation of the covenant did not turn on any disputed issue of fact, and that there was therefore no reason to defer determination of its construction until trial [11]. The Judge noted that the provisions “have not been well drafted” [9], but he appears to have regarded their meaning as tolerably clear. In particular, he took the last sentence of the extract quoted above to mean that Bartholomews would pay Mr Thornton for six months after termination, providing he observed the covenant [20], [26].

Having construed the covenant, the question was whether it was reasonable, and thus enforceable. Following WRN Ltd v Ayris [2008] EWHC 1080 (QB) and Patsystems v Neilly [2012] EWHC 2609 (QB), reasonableness fell to be assessed at the time the covenant was made, when Mr Thornton was a new trainee [22]. On this basis, the covenant was “plainly far wider than is reasonably necessary for the protection of Bartholomews’ business interests” [23]:  

• Mr Thornton had no experience and no customer contacts at the time the covenant was made. The wide-ranging covenant was thus “manifestly inappropriate” [22].
• The covenant applied to all customers of Bartholomews and associated companies, whether or not Mr Thornton had done work for them, or even knew of them [23].
• Mr Thornton primarily dealt with customers in West Sussex, and had no clients in Wiltshire, Dorset or Kent [12]. The area restraint was thus unjustifiably broad [25].  

The Judge treated as immaterial the fact that Mr Thornton would be paid during the period of the covenant, saying that “it is contrary to public policy in effect to permit an employer to purchase a restraint” [26].

As to the confidentiality clause, the Judge concluded that there was no evidence that Mr Thornton was in possession of any specific confidential information, as opposed to the general stock of skill and knowledge that he had gained during his employment [27].  

The contract’s provision for post-termination payments is unusual, and the position on the authorities is perhaps not quite as clear as the judgment implies. The Judge relied on the Court of Appeal’s ruling in JA Mont (UK) Ltd v Mills [1993] IRLR 172 [26], but in Turner v Commonwealth & British Minerals Ltd [1999] EWCA Civ 3055 a differently-constituted Court of Appeal suggested (at [19]) that post-termination payments could be relevant to a covenant’s reasonableness. The Judge’s approach, and that of the Court of Appeal in Mont, is arguably supported by Lord Parker’s comments in Herbert Morris Ltd v Saxelby [1916] 1 AC 688, 707:  

The full judgment can be read here.