In Leonard Coppage and Freedom Security v SafetyNet Security [2013] EWCA Civ 1176, published on 11 October, the Court of Appeal has just confirmed in its reserved judgment why a six month post termination restraint on the solicitation of "any individual or organisation who has during your period of employment been a customer of ours" was a fair and reasonable restraint satisfying long established principles, even though it was not limited to customers of the employer within the employee's final 6 or 12 months of employment before termination.
In emphasising that the courts should not be sidetracked by arguments from merely theoretical or fanciful possibilities, the Court of Appeal carefully noted the fact that SafetyNet was a company with a single branch and 106 customers in its trading history, 98 of whom were live when Mr Coppage left. This was in marked contrast to the circumstances in cases such as Office Angels v Rainer-Thomas, where the company's nationwide presence with 6-7,000 customers at 34 branches counted against a non-solicitation clause where the employee in question had only ever had contact with 100 customers at 1 branch - for all practical purposes this had been a non-competition clause in all but name.
In the present case, it was particularly worthy of note that the non-solicitation clause went on to read "if the purpose of such an approach is to solicit business which could have been undertaken by us". In the Court of Appeal's view, this gave the clause its commercial practical reality. Had any customer left on bad terms, leaving no prospect for SafetyNet to regain its business, the solicitation of such a customer would not have been a breach of the clause.
It is also not to be overlooked that the Court of Appeal concurred with the trial judge's assessment of damages in the sum of £50,000 then and there. The award was neither wrong in the absence of evidence relating to expenses, nor arbitrary. It was based upon acceptable unchallenged general evidence relating to revenue and profitability, and well within the reasonable judgment of an experienced Mercantile Court judge.
All in all, a sound and sensible decision likely to be of particular comfort to small businesses looking for necessary and reasonable protection for their customer bases, without having to fear challenges based on merely technical arguments and smokescreens.
For any advice upon similar circumstances, whether to prevent or to cure, please contact David Cooper.
