馃攳
Ryanair V Peter Bellew Employment Case-High Court Finds Non Compete Clause Void - YouTube
Channel: Terry Gorry Solicitor
[0]
in today's video I want to take a look
at the question of restrictive covenants
[6]
or non-compete clauses in the employment
contract
[8]
non-compete clauses are quite
[20]
common the fancy name or the legal name
for these types of clauses are
[25]
restrictive covenants and a lot of
employment contracts especially
[29]
contracts for middle management or top
management positions will have a
[35]
restrictive covenants various
restrictive covenants the one that I'm
[39]
referring to in this video is the you
will not take up employment for a
[45]
certain period of time after leaving
this job that's the type of thing I'm
[49]
talking about non-compete employment
restrictive covenants now very
[55]
interesting case high-profile case was
heard in the High Court in December of
[62]
2019 involving Ryanair and a top manager
called Peter Bellew. Bellew was to leave
[69]
the job with Ryanair there was differences
in his relationship or maybe perhaps a
[77]
breakdown of his relationship with
Ryanair and with the CEO Michael O'Leary
[83]
and between the jigs and reels Peter
Bellew was to leave his job and join Easy
[90]
Jet. Easy Jet is a competitor of
Ryanair and O'Leary and Ryanair decided
[98]
that they would have to point out to mr.
Bellew that there was an employment
[103]
contract restrictive covenant preventing
him from working in the airline industry
[109]
for a period of 12 months after leaving
Ryanair and on that basis Ryanair went
[116]
to the High Court and sought an
injunction to prevent Mr. Bellew from
[120]
taking up employment with EasyJet the
question was and this was Mr. Bellews
[127]
position that the restrictive covenant
was unenforceable
[132]
because it was a restraint of trade and
it affected his constitutional right to
[138]
earn a living like all rights, the right
of an employer or the right of an
[143]
employee courts are often tasked with
the job of balancing the rights the
[150]
conflicting rights so on the one hand an
employer has a right to restrict to a
[155]
certain degree an employee who's
departing from disclosing for example
[159]
confidential information and perhaps has
a right to restrict employment for a
[165]
certain period of time and on the other
hand the employee has a right to earn a
[169]
living and a constitutional right to
earn a living and not being involved in
[175]
any sort of a restraint of trade in this
particular case however the contract of
[180]
employment said that for a period of 12
months after the termination of your
[184]
employment you shall not without the
prior written consent of the company
[188]
directly or indirectly in any capacity
either on your own behalf or in
[193]
conjunction with or on behalf of any
other person we employed engaged
[197]
concerned or interested in any capacity
in any business wholly or partly in
[202]
competition with the company for air
passenger services in any market that
[208]
to anybody's reading is fairly wide is
very wide in fact and that was for a
[215]
period of 12 months the High Court then had
to decide whether that was void or was
[221]
it enforceable the company or the High
Court recognized that restrictive
[227]
covenants were enforceable and were
acceptable provided the restriction were
[233]
reasonable between the parties and
provided that it was in pursuit of a
[239]
legitimate objective the High Court in
this particular case December 2019
[246]
looked at all of the case law in this
area however it did find that the
[255]
restraint that Ryanair sought to impose
went further than what was necessary for
[263]
the legitimate protection of its
interests
[266]
went further than and for that reason
the High Court decided that this
[273]
particular clause was void and
unenforceable and was an unjustified
[279]
restraint of trade so essentially there
is nothing wrong with restrictive
[286]
covenant there's nothing wrong with a
non-compete clause but it must not go
[290]
beyond what is a legitimate pursuit a
legitimate objective of the employer if
[296]
it goes too far if it's unreasonable it
will be struck down and held to be void
[303]
for an unjustified restraint of trade
now there is particular situations where
[309]
a court can actually decide that a
particular Clause for example for 12
[315]
months is unreasonable and unjustified
and substitute a six-month period
[321]
for example but in this particular case
the way that the contract was drafted the
[326]
way the restrictive covenants were
drafted it wasn't actually possible for
[331]
the court to tweak it or to cut out a
part of it because it was whole as it
[337]
were for this reason it was void and
unenforceable so Bellew could go on then
[343]
and work with Easy Jet and Ryanair were
refused an injunction because really two
[349]
reasons 1) the restraint preventing the
departing employee Mr. Bellew from
[354]
working with any European airline went
beyond what was justified and two the
[361]
restraint preventing Bellew from taking
up employment in any capacity goes
[366]
beyond the legitimate interests of
Ryanair and was not justifiable for
[371]
these reasons the Court struck it down
the take away for employers the take
[375]
away for employees is that a restrictive
covenant is fine and enforceable and
[380]
acceptable provided that it doesn't go
beyond what is justified in pursuit of a
[387]
legitimate objective so employers need
to understand that a one-size-fits-all
[392]
approach in relation to restrictive
covenants in contracts will not cut the
[398]
mustard and will leave you open
to the restrictive covenant being held
[403]
to be void and unenforceable
interestingly the 12 months as the
[409]
temporal restraint is acceptable and was
owned unproblematic according to the
[414]
High Court
but the restrictive covenant in this
[419]
case the high court case of Ryan Air and
Peter Bellew saw a restrictive covenant
[424]
that was far too wide and was not going
to be acceptable not going to be
[429]
justified interestingly as well the High
Court made the point that confidential
[435]
confidentiality clauses in contracts of
employment whilst necessary and
[440]
acceptable are actually very difficult
to enforce in practice because
[445]
confidential information can be used and
abused without any evidence of the
[449]
breach for example if a top-level
executive leaves the place goes to a new
[456]
place has information in his head or her
head for example about negotiations
[463]
about deals about maybe rebates or
discounts and stuff like that that
[467]
information obviously can be used or may
be used without anybody knowing about in
[474]
the negotiations that follow
anyway this case Ryan Air versus Peter
[480]
Bellew its a December 2019 case
decision it's interesting and it is a
[488]
very good analysis, a very good review of
the whole area of restrictive covenants
[493]
in the contract of employment and if you
want to read the full decision and read
[499]
a blog post that goes into it in more
detail you can go to my website
[504]
employment rights Ireland.com and
you'll find an analysis of that in my
[510]
blog that I've written I look at various
previous Irish court cases involving
[515]
restraint of trade and employment
contracts and restrictive covenants and
[519]
you'll get a link then to the actual
high court decision it's a long decision
[524]
but if you have an interest in this area
of law it's something that is worth your
[529]
while having a look at because you'll be
very very knowledgeable
[533]
about restrictive covenants in
employment contracts after that hope you
[536]
find this video useful if you do give us
the thumbs up down below and you may be
[540]
interested in subscribing to my youtube
channel if you are hit the subscribe
[545]
button down below
and hit the bell button and you'll be
[548]
notified every time I upload a new video
thanks
Most Recent Videos:
You can go back to the homepage right here: Homepage