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On appeal from: [2017] EWCA Civ 1054

This appeal considered whether the doctrine of restraint of trade is engaged by a restriction on post-employment shareholding, the proper construction of the phrase ‘interested in’ in a non-competition covenant, and the correct approach to severance of a non-competition covenant.

The Supreme Court unanimously allowed the appeal, rendering the non-competition covenant enforceable. The Court held that the restraint of trade doctrine is engaged by a prohibition on holding shares. It considered that, in restrictive covenants, the phrase ‘interested in’ generally refers to or includes holding shares.

The Court determined that the appropriate test for severance was not that developed in Attwood v Lamont, which has been overruled. Rather, the new test for severance is whether the objectionable words can be deleted without generating any major change in the overall effect of all the post-employment restraints in the contract.

The Court concluded that the words ‘or interested’ were capable of severance and so the non-competition clause was enforceable.

For judgment, please download: [2019] UKSC 32
For Court’s Press Summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court Website (21 Jan 2019 morning session) (21 Jan 2019 afternoon session) (22 Jan 2019 morning session)