The Supreme Court has today handed down judgment in Tillman v Egon Zehnder Ltd (“EZ”), which is the first employment competition case to have reached the highest court in the land in over 100 years. Adam appeared on behalf of the Appellant, EZ, who were successful in their appeal.
Ms Tillman’s contract of employment contained a non-competition clause which prevented her from engaging or being concerned or interested in any business carried on in competition with the EZ’s business. Following her termination, she wanted to take up employment with a competitor, and EZ applied for an injunction to stop her doing so. The judge granted the injunction. The Court of Appeal allowed the appeal. The Court of Appeal interpreted the phrase “interested in”, to include a shareholding in a competing company. It was accepted by EZ that there was no legitimate basis to prevent Ms Tillman from having such a shareholding, and submitted that the phrase could be severed to preserve the covenant. The Court of Appeal rejected that contention.
Judgment of the Supreme Court
The Supreme Court held that the clause was indeed apt to encompass a shareholding, and that it was subject to the doctrine of restraint of trade. Contrary to the Court of Appeal’s judgment, however, the Supreme Court held that the clause could be severed. In so doing, the Supreme Court overruled the case of Attwood and modified the guidance on severance provided in Beckett. The basis on which severance is to be allowed henceforth in the majority of cases is as follows:
Accordingly, the Supreme Court has allowed the appeal, and restored the injunction granted at first instance, subject only to the removal of the words “or interested”.
James Laddie QC and Adam Solomon QC represented the Appellant, instructed by Patrick Brodie at RPC LLP