In the recent case of Kau Media Group Limited v Thomas Hart [2025] EWHC 553 (KB), Jeremy Hyman KC sitting as a Deputy Judge of the High Court reaffirmed the principals in relation to the enforcement of post-termination restrictions (“PTRs”). This case also serves as a reminder as to the importance of pleading your case properly. 

In the instant case, the claimant wanted to restrict Mr Hart (the Defendant) from working for his proposed new employer MiSmile Media Ltd.  Mr Hart had signed a contract of employment on 02 October 2020.  He was employed as an account director with a base salary of £38,000.00 plus commission.  In 2021 became the account director for MiSmile Network Ltd (“MNL”). 

On 04 September 2024, Mr Hart resigned from the Claimants employment and on 19 September 2024, he confirmed that he had accepted a job at MiSmile Media Ltd (“MML”) (an associate company to MNL).  On 09 October 2024, a pre-action letter was sent to Mr Hart reminding him of the PTRs and the anticipated breach of the same, the letter set out the key terms of his contract, as follows:

“You agree that you shall not either on your own account or on behalf of any other person, firm or company directly or indirectly:

“2.1 during the Initial Restricted Period: (a) be engaged or concerned or interested or participate in a business the same as or in competition with the Business or relevant part thereof provided always that this paragraph shall not restrain you from being engaged or concerned in any business concern in so far as your duties or work shall relate solely to services or activities with which you were not concerned to a material extent during the Protected Period…”

2.2 during the Extended Restricted Period: (a) in respect of any Products or Services solicit, facilitate the solicitation of or canvass the custom or business of any Relevant Person; (d) in respect of any Products or Services, deal with or provide or supply any Relevant Person…”

The Particulars of claim

The matter was issued at court. At [24] Judge Hyman KC stated the following in respect of the particulars of claim:

‘The Particulars of Claim are essential to defining the issues in dispute at trial. The Defendant, at the close of the case, argued that the Claimant’s argument in closing had proceeded on a basis that was insufficiently pleaded.  In particular, the Defendant argued that there had been inadequate pleading of the Claimant’s case on “customer connection” as the basis for injunctive relief, as opposed to protection of confidential information.  It is necessary therefore to note what is and is not alleged by those pleadings’

The Claimant claimed Mr Hart had access to the identities of client books, business practices, supplier contracts etc. Whilst no formal admission was made, the Defendant accepted being aware of e.g. the broad charging structure of the Claimant but nothing more as commercial terms were negotiated by another team.  The Claimant also asserted MNL are a direct competitor, a point denied by Mr Hart. 

Mr Hart asserted the pleadings inadequately identified the confidential information, why it would be known or retained by him.  It was also stated the Claimant failed to plead why MNL would target the Claimant’s clients or why the processes and systems in question were confidential. At [32], it is noted the particulars of claim did not identify or plead any actual breach of the PTRs, rather the pleading was of ‘anticipated breach’ of the PTRs. 

The Claimant did not seek to amend its pleading at the trial. 

At [35-36] Judge Hyman KC stated as follows:

‘At the close of the case Mr Wibberley for the Defendant argued that that trade connections ground was never properly pleaded and had it been so different evidence may have been adduced to meet it, including the offer of undertakings not to approach particular clients or customers of the Claimant (indeed such offer is made in the pre-action correspondence recited above).

In my judgment and having regard to the nature of the PTRs there is force in this objection. Given the previous offer of undertakings not to approach specific customers in pre-action correspondence, I consider it was incumbent on the Claimant to identify (whether by a confidential list at least some further particularity) those customers in respect of whom the “customer connection” ground was relied on as a legitimate proprietary interest deserving of protection. That said, the nature of the non-solicitation/non-deal PTR and its specific wording is such that it is tolerably clear that that PTR (2.2(a) and (d)) relates to those previous customers (relevant persons during the protected period) with whom Mr Hart had material dealings while Account Manager’

Judge Hyman KC set out the key legal principles in relation to such as case:

At [4]:

‘…It is for the promissee (here the Claimant) to establish that any PTR relied on is reasonable as between the parties and to satisfy that burden the promisee must show first that the PTR in question protects legitimate business interests of the promisee and secondly that the PTR goes no further than is reasonably necessary to protect those interests. In addition there is a third element recognised by the Supreme Court in Harcus Sinclair LLP v. Your Lawyers Ltd at [48] which is that the promisee must show that the restriction is commensurate with the benefits secured to the promisor under the contract. If the promisee fails to establish the reasonableness of the PTR then the PTR is void and unenforceable’

At [5]:

‘The parties agreed that in this context the approach adopted by Cox J. in TFS Derivatives Ltd v. Morgan [2005] IRLR 419 §35-38 was a useful one for the Court to adopt in seeking to determine the relevant issues in this case. That is to say approaching the pleadings and evidence by a four stage process as follows:

(a)

First, identifying what the terms of the PTRs mean and whether they are engaged on the facts by the Defendant’s proposed employment.

(b)

Second, if those terms are engaged on the facts, whether the Claimant has established its pleaded case that it has a legitimate business interest deserving of protection by the Court upholding such restrictions. If not, then the analysis ends there.

(c)

Third, if the legitimate business interest is established, whether the covenant is in all the circumstances reasonable, to protect that interest.

(d)

If the covenant is not reasonable, and therefore not enforceable, a further question may arise whether the objectional parts of the PTR can be removed or ‘severed’ without altering or re-writing the clause (for example by deleting words/clauses an issue considered by the Supreme Court most recently in Tillman v. Egon Zehnder Ltd [2019] UKSC 32.)’

At [50]:

‘…In particular, Gloster J in Brake Brothers Limited v Ungless [2004] EWHC 2799 gives a very helpful summary of the key propositions applicable to a case such as the present at §15 which I reproduce below:

• Covenants in restraint of trade are prima facie unlawful and accordingly are “to be treated with suspicion” see per Laddie J in Countrywide Assured Financial Services Limited v. Smart ChD, Laddie J, 7 May 2004.

• It is for the covenantee to identify a legitimate business interest that is capable of protection.

• It is for the covenantee to show that the covenant extends no further than is reasonably necessary to protect that interest and the court will enforce the covenant only if it goes no further than is reasonably necessary to protect the trade secrets or other legitimate interests of the previous employer: see, for example, Scott LJ (as he then was) in Scully UK Ltd v. Lee [1998] 1 ICCR 259.

• The court will scrutinise more carefully covenants in employment contracts, as opposed to ordinary commercial contracts where it will more readily upheld the covenant as being agreed between parties of assumed equal bargaining power.

• A covenant should be assessed for its validity at the date upon which the contract was made.

• A covenant will be upheld if the employer can show that it has been designed to protect his legitimate interests that, properly construed, the covenant extends no further than is reasonably necessary to protect those interests: see Mason v. Provident Clothing and Supply Ltd [1913] AC 724; Herbert Morris v. Saxelby [1916] 1 AC 688.

• If a covenant can be construed in two ways, one of which leads to its invalidity, then the court should prefer the alternative construction: see Tern v. Commonwealth and British Minerals Ltd [2000] IRLR 114 at paragraph 14.

• A covenant should be interpreted in the context of the agreement as a whole so as to give effect to the intention of the parties.

• The legitimate interests which justify the imposition of a covenant in restraint of trade are (i) trade connection; (ii) trade secrets or confidential information akin to a trade secret; and (iii) staff stability.

• Trade connection is established where it can be shown that, by virtue of his position with the employer, the employee will have recurrent contact with customers or, as in this case, suppliers, such that the employee is likely to acquire knowledge of and influence over the customers or suppliers.

• An employee has a legitimate interest in maintaining the stability of his workforce.

• In order to determine whether an item of information is a trade secret or confidential information akin to a trade secret, the court should have regard to a number of factors as described the Court of Appeal in Faccenda Chickens v. Fowler [1987] 1 Ch 117 at pages 137B to 138H, including the nature of the employment and the nature of the information itself. It is clear that this must be a trade secret or information of such a highly confidential nature as to require the same protection’

Per Judge Hyman KC at [56]: ‘At the close of the case Mr Wibberley for the Defendant submitted that the Claimant had not made good his case with respect to the protection of confidential information or trade secrets e.g. client book, charging structure, business practices. None of this, he said fell into the category of trades secrets and echoed Mummery LJ’s observation supra that “ Lack of precision in pleading and absence of solid evidence in proof of trade secrets are frequently fatal to enforcement of a restrictive covenant”.

The Findings

Judge Hyman KC found in favour of Mr Hart, stating ‘I am not satisfied that it has been established by the Claimant that MML is ‘in competition’ with KMG’ [64], and ‘I do not find that the Claimant has established a legitimate business interest requiring protection.  The primary relevant interest relied on by the Claimant is ‘confidential information’.  I agree with the Defendant that it is settled law that this category of legitimate interest does not cover “the skill, experience, know-how, and general knowledge” acquired by an employee’ [67].

Further at [67]:

‘I have already indicated that there is force in the Defendant’s submission that the confidential information must be particularised sufficiently to enable the court to be satisfied that the Claimant has a legitimate interest to protect. Given that the identified competitor MML will already possess the MNL data and information by dint of being an associated company under the same ownership I do not consider that there is any legitimate proprietary interest here to protect. MNL by bringing the work in house to MML and employing Mr Hart is not thereby giving to MML confidential information which is the property of KMG. I have already concluded above that the confidential information if it is such in relation to other dental businesses apart from MNL is not sufficient to amount to a legitimate proprietary interest deserving of protection by injunctive relief’

And [68]:

‘I therefore consider that the Claimant has failed to establish that MML is in competition with KMG and that KMG has not established that it has a legitimate proprietary interest under the non-compete clause that is required to be protected beyond Mr Hart’s ‘know how’ which is not something which it owns’

In any event, Judge Hyman KC also found clause 2.1 was so wide as to be unreasonable and unenforceable [70], that the non-dealing and non-solicitation provisions are not enforceable as they were not reasonably necessary to protect any proprietary interest that has been proved by the Claimant [75].