The key to post termination restrictions is careful drafting. Courts will examine restrictions closely, as they do not want to prevent a former employee from earning a living, unless the employer has a legitimate interest to protect. In the recent case of Prophet v Huggett the High Court took the surprising step of rewriting part of a restriction, making it enforceable. Mr Huggett had a 12 month non compete restriction, which, if read literally, had no effect as he was prevented from being employed in connection with Prophet's products. As Prophet was the only company selling its product, he was not technically in breach if working for a competitor who dealt with similar products.
The court treated it as a drafting error and simply added the words "or similar" to the end of the clause. Fortunately, the Court of Appeal saw sense and overturned the decision, finding that if a clause is poorly drafted by the employer, they will have to live with the consequences. Mr Huggett was therefore not bound by the non compete clause. Employers should always ensure they have properly drafted restrictions tailored to protect their businesses.
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