Court Of Appeal Ruling Highlights Challenges In Obtaining Interim Injunction To Enforce Non-compete

• Published date: 16 June 2022
• Law Firm: Herbert Smith Freehills
• Author: Ms Anna Henderson and Nick Wright

The Court of Appeal has recently emphasised the importance of speed if an ex-employer wishes to obtain an interim injunction enforcing a non-compete covenant. The longer the delay, the more likely it will be that the employee can persuade the court that the damage to the ex-employer's interests has already been done and the status quo favours allowing them to continue in their new job (rather than the grant of an interim injunction preventing them from working). The ruling also suggests that it may be more difficult than previously thought to obtain this type of injunction, as the Court rejected the argument that damages should normally be seen as an adequate remedy for the employee unless there are exceptional circumstances. Following this judgment, unless the employee is a very wealthy individual or the ex-employer is willing to offer to continue to pay the individual during the period of restraint, damages are likely to be viewed as inadequate and this may well tip the balance against granting an injunction.

In Planon v Gilligan, G joined a competitor 11 days after leaving his employment with software company P. P applied...