The High Court has found that a 12-month non-compete clause in an ex-employee's contract of employment was unenforceable because it went further than was reasonably necessary to protect the company’s legitimate business interests.
Facts
The defendant, Max Potter, worked for Tom James UK Limited (Tom James) as a salesperson in London between August 2017 and June 2025. Tom James is a subsidiary of a USA company which sells made to measure suits and shirts manufactured in the USA. Mr Potter was a skilled salesperson with his own client list but was not involved in leadership or strategy.
On joining Tom James, Mr Potter was given a contract which included a set of restrictive covenants which were limited in duration to six months and drafted quite narrowly. In 2022 this was replaced by a further contract which doubled the non-compete clause from six to 12 months and removed geographical limits (so it no longer just covered London). It also expanded the types of role Mr Potter was prevented from doing. The clause was not restricted to only similar services or activities - the new clause prevented Mr Potter from competing in “any capacity” in any other business concern. The Court found that Mr Potter was not informed of the stricter covenants when he signed the contract in 2022.
Mr Potter handed in his notice in May 2025. Tom James suspected that he intended to set up in competition and to solicit their customers. It therefore brought a case in the High Court to enforce various restrictive covenants in Mr Potter’s contract of employment. In particular they wanted to enforce the non-compete clause that stopped him working in competition with Tom James for 12 months after leaving. They also accused him of breaching his duties of good faith, fidelity and confidentiality.
At an interim relief hearing in July 2025 Mr Potter gave undertakings not to solicit or deal with Tom James' existing customers and not to approach his previous employer's staff, to poach them, all for a period of 12 months from the end of his notice. However, Tom James rejected this offer and went to trial seeking an Order to enforce the 12-month non-compete clause.
The High Court dismissed the claim. It declared that Mr Potter had not breached the terms of his contract and that the non-compete restrictive covenant was unenforceable.
In making this decision the court took into account the following factors:
- The restrictive covenant was unenforceable because it went further than was reasonably necessary to protect the company’s interests.
- The clause was too broad in terms of its duration, the range of businesses protected, its geographic scope, and role coverage. It prohibited Mr Potter working “in any capacity” for a competitor – which could include being a "receptionist, driver or floor sweeper".
- The Judge was critical of a “one size fits all” restrictive covenant that was applied globally and identically to all staff regardless of seniority; the restrictions applied equally to leadership roles in London as well as mid-ranking sales personnel.
- The court also noted that Tom James had given no evidence to justify the need for 12 months duration, other salespeople had left and joined competitors after six months and Tom James did not present evidence of any problems.
What does this mean for employers?
The decision provides guidance for employers on the current limits of enforceability of non-compete clauses, particularly in client-relationship businesses.
Employers should ensure employment contracts are carefully drafted to reflect the employer's actual commercial needs and business interests. Non-compete clauses must be tailored to the individual employee’s position as well as being proportionate. The restriction should be no wider than necessary in terms of duration, geography, or role. In deciding enforceability, courts will also look at whether the employer could have used less restrictive measures to achieve the same aims – i.e. whether a non-solicitation of clients clause could be used rather than a non-compete clause. For information on what the future of non-competes may look like, see our article here.
