[2025] EWHC 2873 (KB)

I shall address the two main legal issues identified above: (1) did the Defendant breach the terms of his contract relating to good faith, fidelity and confidentiality; (2) is clause 19, bullet point 3, which is the restrictive covenant against competition (RCC), enforceable? Within that second issue the parties agreed that the Court should decide on:

The Defendant challenged the validity of the whole 2022 contract in the defence. This challenge was abandoned during the trial.

On the findings of facts I have made above I do not consider that the Claimant has proven that the Defendant breached the employment contract in any of the ways set out in the particulars of claim. Having preferred the Defendant’s evidence, supported by the witnesses he called, I find that the evidence of Mr Adams, Ms Colby and Mr Raynes was not sufficient to prove the allegations made against the Defendant. I dismiss the claim for breach of contract made against the Defendant. I find that he did not breach his duty of fidelity, good faith or confidentiality to the Claimant. He did not act inappropriately when speaking to Trunk, Mr Kwak, Mr Morrison or Mr Powell (the latter being an un-pleaded collusion assertion). He did not intentionally run down his sales between January and his resignation. He did not unreasonably refuse to assist with the handover after his resignation and he did not unreasonably delay returning the Claimant’s customer information on the first USB stick or the WhatsApp messages from his personal phone on the second USB stick. Nor did he solicit the Claimant’s Restricted Customers. I find that the diagnosis of stress at work (which was unchallenged) was proven and prevented his involvement in handover.

The Claimant conceded that some of the words used in the RCC were not reasonably necessary or too vague to be enforceable. Those words were (or intends to be) in clause 19 bullet point 3. Thus, unless the Court is prepared to blue line them, the RCC will be unenforceable. There was no objection to them being severed, in that severance would not affect the meaning and effect of the contract’s restrictive covenants under the test set out above. I agree that those words are severable. I take this into account when making the decision below. If all the rest of the RCC is enforceable, then I will sever those words.

Legitimate Business Interest. Confidential Information. The definition of Confidential Information is set out in clause 14. For instance, Work Product is defined there. It includes customer lists. As to the legitimate business interest which the Claimant sought to protect, I consider that, other than the Defendant’s customers’ information, the Claimant has not proven that any of the asserted range of relevant information was: (1) in the Claimant’s possession or (2) in the Claimant’s possession and confidential or (3) in the Claimant’s possession and of value to competitors. In 2022, when the contract was signed, the Defendant had worked for the Claimant for 5 years. He was a mid-ranking salesperson who had not yet peaked. He was not in a leadership position. He did not have access to the level of business information available to Mr Raynes or any management employees. I find that he did not have or gain access to any valuable confidential management level information about pricing strategies or margins, future garment design plans, product reviews, secret future product amendments, secret changes or secret new services, new systems, secret new processes, secret proposals, forecasts, secret terms of trade or business strategies. What he and all UK salespersons had, apart from their skills and knowledge of the trade generally, was the information provided in the VSS app and the training provided about the Claimant’s prices for their custom made and off the peg products and accessories which salespersons were required to offer to the public. He passed those on, where he could, to every customer, referral and prospect (as defined in evidence). He advertised some of the Claimant’s products and promotions using word of mouth, LinkedIn, messaging and at trunk sales. The parties agreed that the main “of value” confidential information he had related to customers and consisted of their contact details at work and maybe home addresses, their measurements, their personal wardrobe and other choices and their interests and other disclosed details which he had recorded. I consider that, at the time the contract was made, both parties would objectively have understood that when a non-leadership salesperson left and after all the IT access had been removed, it was unlikely that the ex-employee would remember the detail of the pricing for the thousands of products or the details provided by customers. He would of course know that the made to measure suits were priced at around £2,500. He would probably remember the names and workplaces of his top customers, and the broad details of their buying wishes. The Claimant never identified or particularised the allegedly confidential information in the Defendant’s possession. All of Mr Adams’ evidence, and Mr Raynes’ evidence was general, non-specific and precisely matched the general words used in clause 14. That was not good enough. It was incumbent on the Claimant to prove the detail of what information was confidential and how it was of value. The Claimant did not do so, despite my prompting on several occasions. Thus, I consider that the only confidential information which the Defendant had, which was the property of the Claimant and in which they had a legitimate business interest was the customers’ details.

Duration. Before considering the more complicated competing submissions on the proper construction of the other parts of the RCC, the duration needs to be considered. There was no alternative construction for the duration of the RCC in the 2022 contract. It was 12 months. In the light of the 12 month restrictive covenants against contacting existing customers for soliciting business and selling them, was there any reasonable necessity for an RCC of that duration?

Buying cycles and the factual matrix of changes in 2022 contract. The Claimant relied on the assertion that in the USA non-compete RCCs are 24 months long. Other than that the Claimant mainly relied on their evidence of buying cycles to justify the 12 month duration. Tellingly, after Mr Hitt’s large-scale review of buying cycles in 2017, the Claimant offered 6 month restrictive covenants to the Defendant and other salespersons, not 12 months. Thus, whatever the result of that large scale analysis, the company itself considered 6 months adequate for salespersons. They had longer RCCs for others. The Defendant’s role did not change in 2022. So, role change did not justify the duration increase. The “one size fits all” 2022 RCC covered leadership and well as salespersons. Leaders had far more responsibility and they had access to more valuable financial information, yet were not differentiated in relation to the duration of the RCC. Additionally, the notice period was kept at one month, so the Claimant clearly did not consider the Defendant was important enough to require a longer notice period (for handovers for instance). Additionally, the factual matrix of the introduction of the 12 month RCC in 2022 proved, on the balance of probabilities, that the Defendant was never informed of the changes to the RCC and that no union or other representative negotiated the new RCC on his behalf. I have no idea what happened at the meeting with Baker McKenzie which Ms Colby said Mr Powell attended and which she asserted involved discussion of RCCs. She made no mention of it in her witness statement and Mr Powell was not called. The Claimant wholly failed to provide any documentation proving that any consideration was given to the salespersons’ interests when the duration was doubled. Nor did the Claimant call their Chief Legal Counsel, Mr Stohner, to give evidence. So, none of the primary evidence which might have justified the doubling was put before the Court. I find that, the Claimant has failed to prove that any consideration was given to the balance of interests between the Claimant and the Defendant (or any salesperson) in relation to duration. Being out of work in his/her field of excellence for 12 months might (and probably would) cause default on his/her mortgage, loss of a house, a car, the ability to care for children and many other things and a very substantial restraint of the ex-employee’s ability to trade. There was no evidence that the Claimant though about that at all.

The main evidence which the Claimant relied upon was various analyses of the Defendant’s sales after 2022. From this, they extracted median buying cycles and sought to use those to justify, in arrears, the decision made in 2022. In doing so they did not use an expert to assist the Court with some independence. On their own calculations they put forwards mean buying cycles of 11.7 months (Hitt 1), 10.77 (Colby) or 8.7 (Hitt 2), but their figures were skewed by their customer sample choices and the outliers they included. On the Defendant’s analysis the majority of his customers (56%) bought in under 6 months and the median was 5.48 months. Whilst I preferred the Defendant’s analysis, I did not find any of this evidence of much value. All witnesses agreed that the 80/20 rule applied to sales, which means that 20 percent of a salesperson’s customers produce 80% of her/his sales. They all agreed that each customer’s buying pattern was wholly individual and changeable, depending on work and personal circumstances, life, death, moving abroad and so on. In my judgment, it was not the buying cycles which could help to justify a duration for an RCC, it was the length of time needed for a salesperson who inherited the departer’s customers, to contact the customers and rebuild a positive relationship with a view to sales. That information should have been provided for a period before 2022, the date of the contract. None of that information was put forward, save for the 2017 information, in general terms, which led to a 6-month RCC that year.

As for the post event sales and records of conversation with customers, which has some, but only post event, indirect relevance, the Defendant caried out a helpful analysis (BP191-193) of contacts, sales and meetings for 77 of his top customers, between his resignation and 9.7.2025. It evidenced an impressive effort by a range of replacement salespersons, showing progress. The sales figures back this up showing sales to 17% (or 18%, as one witness stated) of the Defendant’s customers. That was near the Hitt target of 20% within 3 months. In my judgment none of the Claimant’s success after the event supported the Claimant’s case that a 12 month RCC was needed.

Policing. The Claimant asserts that it is difficult to police the 12 month non-solicitation and non-dealing covenants for their customers. However, the evidence in support of that pleading was mere assertion. At least 52 salespersons had left the UK company during the Defendant’s employment. Many had left before 2022. No evidence was provided by the Claimant about how difficult it had been to police those departures. Mr Duncan gave evidence of directly competing with the Claimant after 6 months. His first 6 months was not held up by the Claimant as difficult to police or as damaging. He was not cross examined on that. The Claimant does not advertise or market in a traditional sense. Their business depends on word of mouth referrals. They know their customers intimately. Their business is utterly different from a business which advertises online or using traditional methods for customers or runs a shop and does not know their customers intimately. The Claimant’s records kept by their salespersons of their customer interactions are detailed. In my judgment the Claimant is in a powerful position to police whether the Defendant is soliciting and so breaking the non-solicit covenant. Of course, the new salespersons would not wish to ask customers outright most of the time. Instead, considering the tone and content of the Defendant’s customers’ communications will likely provide clear or implied evidence of solicitation. If a significant number of customers refuse to communicate at all, that would perhaps be an obvious example. Standing back, with 52 departures before the Defendant left, it cannot have been beyond the capabilities of the Claimant to have gathered evidence showing what had happened when a departing salesperson had solicited in breach or once who solicited without breach (Mr Duncan for instance – who did compete from month 6 onwards), and what had happened when they did not compete (persons A,B,C,D etc). No such evidence was called. Additionally, I found it telling that the Claimant allowed or expected salespersons to use their own phones to message and call customers. That would allow them, after departure, to call customer and their names and numbers would come up as known by each customer. If the company had provided work phones and numbers, and withdrawn them on departure, the customer would not know the personal numbers of the departed salesperson. However, the new salesperson could make the call on the same phone and the customer would know the number (or rather his phone would). Mr Adams said he had never contemplated this. Contradicting him, Ms Colby said the Claimant had contemplated this and had decided not to provide company phones. This would have been a less restrictive way to protect their customers but they chose not to deploy it. So, in relation to the assertion that the other restrictive covenants were difficult to police, that case was not made out by the Claimant.

Taking all the evidence into account, I consider that the Claimant has failed to prove that the 12 month duration of the 2022 RCC was reasonably necessary to protect the Claimant’s legitimate business interests. It is therefore unenforceable. Having made this decision there is no need to consider the other issues and submissions, however I will do so because the parties spent time on them.

Capacity and Role. The RCC prevents the Defendant from competing with any Restricted Business of the Claimant in “any Capacity” (role) in any other business concern. There was no dispute that “business concern” covered a very wide range of business vehicles, including self-employment, employment by another company or partnership, consultancy or otherwise. The words “any Capacity” are also wide. They were defined in Clause 1 on interpretation and include: as principal agent, consultant, officer, shadow director, director, partner, independent contractor, employee directly or indirectly. The Defendant submitted that to be reasonable and necessary the Capacity should have been restricted to only his role with the Claimant, not the wide range of roles in the term “any Capacity”. No evidence was provided by the Claimant to support the need for this wide definition of the competing roles. Prima facie, in my judgment, the RCC should relate to competition in the role the Defendant was doing at the Claimant’s company or a role close to that role, so as a salesperson. The RCC definition covers receptionists, drivers, floor sweepers and all roles. No evidence was provided by the Claimant to justify the deletion of the role relief (narrowing) clause in clause 17 of the 2017 contract. On the evidence put before me, in my judgment, the Claimant has failed to justify the reasonable necessity of the width of the RCC on the competing roles which are caught by it.

Range of competitor businesses. There is no restriction on the range of competitor businesses save that they are in competition. So, shops and online businesses which sell made to measure, and those which sell high end, off the peg and those which sell high end shoes and ties, are all included. No evidence was provided by the Claimant as to why this scope should not have been restricted to businesses which offer mainly a face to face service for made to measure garments with accessories tagged on. So, for this reason, I consider that the RCC range of competitor businesses was not shown to be reasonably necessary.

Claimant’s Restricted Business: how many businesses? Moving on to the definition of the Claimant’s Restricted Business. The first matter to note is that it the RCC is not restricted to the Defendant’s UK employer. It is much wider. It includes any Group Company. That is defined as including the USA Tom James holding company and any subsidiaries of the Claimant or the USA holding company. The Claimant did not direct me to a list of subsidiaries or provide them in its evidence in chief. The Defendant did set out the huge range of asserted subsidiaries in the USA and around the world. I have recited his evidence above. This included garment manufacturers in the USA (Oxxford and many others); manufacturers in Canada and Chile; a shop in Saville Row under a subsidiary’s name and more. The Claimant and the holding company sold in many EU countries. The Defendant gave unchallenged evidence that the Claimant sold to 86 countries worldwide. As I understood the evidence, only the Claimant could sell the Claimant’s made to measure ranges. No competitor could sell those, so how can any other company compete for that product? The only competition could be for other similar products. As for the garments which any company could buy from the subsidiary companies, and sell onwards, I do not understand the need for the RCC if those sales were to be to new buyers (as distinct from the Claimant’s customers or even as distinct from the holding company’s customers). A sale is a sale. There was no dispute on the breadth of the companies covered by the non-compete. No evidential justification was put forwards by the Claimant for preventing the Defendant from competing with this huge range, instead of just his own employer. The core need for protection would be to protect from the Defendant working in competition for existing customers, in a job selling made to measure suits, face to face, in London. The core is not to protect from the Defendant working in competition, if his job would be selling made to measure suits, face to face, in London to the Claimant’s customers. Not to other people who are not the Claimant’s customers. Furthermore, the core is not to protect from the Defendant working in competition, if his job would be selling made to measure suits, face to face, in the UE or Australia or the USA, to other people who are not the Claimant’s customers. I consider that the Claimant has failed to satisfy the burden of proof that this huge range of competing companies was reasonably necessary to protect the UK Company’s legitimate business interests in their own customers.

Material involvement. The words limiting the scope of the Tom James’ businesses with which the Defendant was restricted from competing under the RCC are: “Those parts of the business of the Organisation and any Group Company with which you were involved to a material extent in the twelve months prior to the Termination Date.” The evidence on this was conflicting, as were the submissions. The Claimant relied on what the Defendant mainly did, which it submitted was selling made to measure suits in London for the Claimant. The Claimant submitted that he had no material involvement in: (1) the USA holding company or (2) Oxxford, or Holland and Sherry, or (3) any of the holding company’s factories or businesses in countries outside the UK or (4) any City outside London or (5) any of the Claimant’s (or the holding company’s) business; and (6) selling the many accessories or off the peg clothing (shoes, ties, shirts, jackets, luggage etc) which he sold. The Defendant submitted that he did sell a wide range of accessories and off the peg garments. Also, he spoke to the USA head office weekly and to manufactures, for instance the Oxxford factory, Holland and Sherry and the facilities in Chile and Canada. He did so weekly and sometimes more often. The Defendant gave evidence that, when chasing deliveries, or going back to the factories with alterations, defects and customer complaints, those were intensely material for customers. So, he submitted he had material involvement in a wide range of worldwide companies owned by the and Tom James USA. I shall deal with each sub issue in turn.

Accessories and off the peg garments. I consider that an objective bystander at the date the contract was made, knowing all the relevant information about what the Claimant’s salespersons did and what the Defendant did, would consider that material involvement with a Tom James business definitely covered all the products which it sold. It did not matter that shoes, belts, luggage and off the peg jackets were a small part of the Defendant’s own sales (whether £40,000 or £60,000 pa), they were a part of his selling job. I consider the Claimant’s submissions on how to construe the accessories and off the peg garments was an unreasonable or fanciful interpretation and I reject it. Thus, the scope of the products which the Defendant could not sell in competition with the Claimant was far wider than only made to measure, and covered off the peg garments (shirts, men’s jackets, women’s jackets), shoes, ties, luggage and all other accessories which he sold for the Claimant. The Claimant provided inadequate evidence to justify this huge width of anti-competition when the Claimant’s main business was to sell made to measure. Potentially it prevented the Defendant working in any shops or large department stores as a salesperson selling any of these goods.

Material involvement. I take into account that the parties two alternative constructions would not have been so much of a problem if the geographical and role reliefs in the 2017 RCC were still in the 2022 RCC, but they were removed. No explanation was provided by the Claimant justifying that potentially substantial geographic widening of scope.The question of whether the Defendant’s involvement in, for instance, the Oxxford factory business or the USA holding company or the Chile factory business or any of the multiple subsidiaries, was material is nuanced. On the one hand, his job was sales in London and once he had made the sale one could say his material involvement in the garment being made at, for instance, the Oxxford factory was over. On the other hand, delivery times, or communications about odd cut shapes for disabled or large size customers, chasing up delays, curing defects in the garments ordered, obtaining resulting corrections or alterations and satisfying complaints, are all very important matters for customers. I have accepted the Defendant’s evidence on the level of his interactions, for instance with Oxxford. After all, why would the Claimant send him to the factory as part of his sales training if that was not material to his job? The Claimant provided no evidence in response to the Defendant’s evidence about his involvement with the overseas factories. Cross examination on his involvement was merely putting the assertion that he did not call businesses like Oxxford very often. In my judgment the only reasonable construction of the term, by an objective, well informed bystander, would be that “material involvement” covers the actions which the salespersons are required to perform in the course of their work for the benefit of the business which aims to increase sales and maintain high levels of customer satisfaction. Actions like chasing orders, correcting errors and ensuring sizes are right are material matters and crucial to customers. I am unable to accept the Claimant’s submissions that such communications are wholly immaterial. Furthermore, if the Defendant had failed to make necessary communications, for instance with the USA Head Office or Oxxford, he could be subject to misconduct charges and discipline. However, the material involvement from those overseas interactions was all plainly material to the Claimant’s business. I consider that a realistic construction of what was “material involvement” included asking “material to which company?” The materiality of all of the Defendant’s actions, including his communications with Oxford, was focussed on the Claimant’s sales by the Defendant to the Claimant’s customers in London. Although it was material to, for instance Oxxford, for their product to be correct, the customer was the Claimant’s, not theirs. Oxxford’s customer was the Claimant, in reality. I consider that the validity principle applies here. Thus, in my judgment, the definition of “material involvement” in the definition of Restricted Business can properly be construed as restricting the scope to the Claimant only, not opening up the range of organisations which he dealt with beyond the Claimant. So, in my judgment, the clause does not cover the USA holding company, or the companies in Chile and Canada and beyond. Likewise, the part of the Claimant with which the Defendant was materially involved was their operation in London, not Birmingham or the USA for instance. So, on the proper constructions of the contract I consider that the geographic scope was restricted to the UK Company’s operation in London by the words “material involvement”. I do not consider that, on this aspect, the contract was wider than reasonably necessary.

Access to information. The 2017 contract did not have this widened definition. The 2022 contract was widened so that Restricted Business included any of the Tom James companies to which the Defendant “had access” to relevant confidential information in the course of his employment. This addition does not have a limitation to “the last 12 months” of his employment. No evidence was provided by the Claimant as to why this extension was added or how it was justified. However, I consider that it was logical for the Claimant to seek to protect any information to which the Defendant had access if it was confidential Information for customers and if that information could be used by a competing company to their advantage. Customer information is the obvious target. The evidence showed that the Defendant was allowed access to USA customer information if he had certain basic facts already. The main principle does not per-se stand out as unreasonable or unnecessary, but the lack of any temporal and geographical restrictions was wholly without justification and hence I do not consider that the Claimant has provided evidence that it was reasonably necessary.