Injunction to Restrain a Restrictive Covenant
A senior sales manager leaves a software firm and, within two months, joins a direct competitor. Her contract contains a 12-month non-compete covering the whole country and a 6-month non-solicitation clause limited to clients she dealt with in the final year. She had access to pricing models and a pipeline of 40 prospective clients. The former employer seeks an interim injunction enforcing both clauses. The manager argues the non-compete is unenforceable as an unreasonable restraint of trade and that, in any event, damages would be an adequate remedy because lost sales can be calculated. The employer has evidence that two of the 40 prospects have already been approached. The manager is the sole earner for a household with two dependent children.
1. Analyse the enforceability of each clause and explain the restraint-of-trade framework.
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Restrictive covenants are prima facie void as restraints of trade and enforceable only if they protect a legitimate proprietary interest and go no further than reasonably necessary in scope, duration, and geography. The non-solicitation clause is likely enforceable: it is limited to six months and to clients the manager actually dealt with, which is a standard, proportionate protection of client connections and confidential pipeline information. The 12-month nationwide non-compete is vulnerable. A nationwide ban on working for any competitor is broad; the employer must show it is necessary to protect confidential information (pricing models, pipeline) rather than to stifle ordinary competition. A court will ask whether a narrower non-solicitation or confidentiality clause would suffice - here it likely would, given the pipeline is finite and identifiable. The clause may be severed if the offending part is genuinely severable, but a nationwide scope is unlikely to be trimmed to reasonableness by severance. Expect the non-compete to fail and the non-solicitation to stand.
2. Apply the interim-injunction test, addressing adequacy of damages and the balance of convenience.
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The court applies a serious question to be tried, then asks whether damages would be an adequate remedy and where the balance of convenience lies. On the non-solicitation clause there is a serious question and the employer's loss (client relationships, confidential pipeline) is hard to quantify, so damages may be inadequate; the manager's cross-undertaking in damages protects her if she later wins. On the non-compete, because enforceability is doubtful, the court is reluctant to grant an injunction that effectively decides the case. The balance of convenience weighs the manager's inability to work in her field against the employer's protectable interest: an injunction restraining her from soliciting the identified clients is proportionate, while a nationwide ban would be a de facto restraint causing severe hardship to a sole earner. The court may grant a limited injunction confined to the non-solicitation clause and the named prospects, and may require the employer to give a cross-undertaking in damages. The two approaches already made strengthen the case for urgent limited relief.