In the Forster case, the employee was bound by an
expressterm in his contract. An express term was not
really needed as there is an implied duty on the part of
employees not to reveal their employers’ trade secrets or
other highly confidential information. The implied duty
will not cover all commercially sensitive information.
customers away from him. A restraint of this kind will
only be valid if the nature of the employment is such
that the employee has personal contact with customers
and some influence over them. Restraints have been
upheld in the case of a solicitor’s clerk (Fitch vDewes
(1921)), a milk roundsman (Home Counties Dairies
vSkilton(1970)) and an estate agent’s clerk (Scorer v
Seymour Jones(1966)). However, an agreement by a
manager of a bookmakers not to engage in a similar
business to his employer within a 12-mile radius on the
termination of his employment was not upheld as the
manager did not have face-to-face contact with his
customers (S W Strange Ltd vMann(1965)).
Once it is established that the restraint only protects
a legitimate interest, the next step is to show that it is
reasonable in the circumstances. The restraint must not
be excessive as regards its area and time of operation.
The two factors are complementary: the wider the area
of the restraint, the shorter the duration which might
be regarded as reasonable, and vice versa. There are no
precise limits; each case is decided on its merits. In Fitch
vDewes(1921) an agreement by a solicitor’s clerk never
to practise within seven miles of Tamworth Town
Hall was held to be reasonable, whereas in Commercial
Plastics LtdvVincent(1964) one of the grounds for
finding a one-year restraint to be unreasonable in the
context of the plastics industry was that it was unlimited
in its area of operation.
If a restraint is upheld by the courts, it can be
enforced by an injunction (see later).
(b)A ‘solus’ agreement by which a trader agrees to restrict
his orders from one supplier. Although such an agree-
ment is subject to the doctrine of restraint of trade, it
may be enforceable if it is reasonable and not contrary to
the public interest. A number of cases have arisen from
the operation of ‘solus’ agreements in the petrol industry.Part 3Business transactions
242
Herbert Morris Ltdv Saxelby(1916)A seven-year restraint on an engineer employed by a lead-
ing UK manufacturer of hoisting machinery was declared
void. Although the engineer had access to confiden-
tial information, such as drawings, charts and company
systems, all that he could take away with him was a very
general knowledge of the company’s methods and sys-
tems. The House of Lords did not regard such knowledge
as a trade secret.Faccenda Chicken Ltdv Fowler(1986)The defendant, Fowler, had been employed as the
claimant company’s sales manager until he resigned to
set up a rival business selling chickens from refrigerated
vans. Several of Faccenda’s employees joined Fowler
in his new business. Their contracts of employment with
Faccenda did not include an express term restricting
their activities if they left their jobs with Faccenda.
Faccenda argued that Fowler and his colleagues had
broken an implied term of the contract by making use of
confidential sales information. The Court of Appeal con-
firmed the existence of an implied duty of confidentiality
but held that the information which Faccenda was trying
to protect was not confidential.An alternative form of protection for an employer is
to insert a so-called ‘garden leave’ clause in an employee’s
contract of employment (Evening Standard Co Ltdv
Henderson(1987)). Such a clause typically requires the
employee to give a long period of notice, e.g. one year.
During the notice period, the employee can be barred
from the workplace to stop him from acquiring any
further information, and he can also be prevented from
working for a new employer until his notice period
expires. Although the employee will continue to be paid,
he or she is left with nothing to do but look after their
garden.
An employer is also entitled to protect his customer
connections by preventing employees from enticing his
Esso Petroleum Ltdv Harper’s Garage
(Stourport) Ltd(1967)
Harper’s owned two garages. It entered into a ‘solus’
agreement with Esso by which it agreed to buy all its
motor fuel from Esso, to keep the garages open all rea-
sonable hours and not to sell the garages without ensur-
ing that the purchaser entered into a similar agreement
with Esso. In return, Esso allowed a rebate on all fuels
bought. The agreement was to last for four-and-a-half
years in respect of one garage and 21 years for the other.
The latter garage was mortgaged to Esso for a loan of