Enforceability of Restrictive Covenants
by Emma
Kynixa Ltd v Hynes and others is a recent High Court case which considered amongst other things the enforceability of restrictive covenants contained in a shareholder agreement.
We always advise that it is important to be very precise when drafting restrictive covenants to make sure that they are reasonable enough to be enforceable. In particular the length of time a restriction lasts and how widely it is drawn should be considered.
In this case the High Court held (with a detailed analysis of the case law) that a widely drawn covenant in restraint of trade binding employees who were shareholders for 12 months was reasonable and enforceable both in terms of its length and remit.
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