High Court restrains broker from competition for 12 months
In Square Global Ltd v Leonard  EWHC 1008 the High Court rejected the employee’s defence that he had been constructively dismissed and it enforced his contractual post-termination restrictions in full.
The employee, who was a Head of Desk at an interdealer brokerage firm, had an employment contract with a six-month notice period and six-month post-termination restrictions preventing competitive employment. The contract had a provision for garden leave but no set-off clause. In November 2019, the employee purported to resign without notice, alleging constructive dismissal and the right to enter into competitive employment immediately.
The employer brought a claim to enforce the employee’s notice period and post-termination restrictions. The employee counterclaimed for constructive dismissal and disputed the validity and enforceability of the restrictions. A speedy trial was ordered, with undertakings from the employee in the meantime.
Following a three-day trial in March 2020, the Court rejected the case for constructive dismissal and found that the restrictions were valid and enforceable. The Court described the employee’s evidence under cross-examination in various respects as unconvincing; it found that for a period of over eight months prior to his resignation, the employee sought to ensure there was material that might prove useful in the event of an employment dispute. The Court:
- declared that the Defendant remained the Claimant’s employee notwithstanding his purported resignation;
- upheld the restraints on competition during the period of the employee’s notice period; and
- upheld and enforced the full period of the post-termination restrictions notwithstanding the lack of any garden leave set-off clause.
The employer has also claimed damages in relation to the employee’s refusal to attend work during his notice period. This aspect of the claim will now be considered at a separate damages hearing to be listed in the future.