Prophet PLC v Huggett: Court amends clause in restrictive covenant
Employment solicitor, Nathalie Stewart, takes a look at the recent decision in Prophet PLC v Huggett and what it means for employers.
The employee had a restrictive covenant that prevented him from working in competition for 12 months after he left employment. The type of work that constituted competition was defined as ‘the provision of computer software systems as produced by the employer’.
In actual fact, nobody but the employer provided computer software systems that the employer had produced. So nobody would ever be in competition under that definition. The covenant was meaningless.
But instead of the Court taking the wording as literal and making a finding that there had been no breach, it added in the words “or similar thereto” to cover competitors that provided computer software systems like those produced by the employer. The covenant was valid and able to be enforced.
What this means for you
Clearly it’s desirable to get the drafting right in the first place. But this case shows the ability of the Courts to not only strike out parts of restrictive covenants that are unenforceable, but also to ‘add in’ words to give effect to the agreement that the parties meant to enter into.
This case is helpful to employers and in line with recent restrictive covenant cases that have been decided in the employer’s favour.
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