The facts

Mr Couture was employed by Jump Trading International Limited as a quantitative researcher.  His contract of employment included an unusual non-compete covenant which was stated to run for between zero and 12 months, with the actual length to be chosen at the discretion of Jump within 20 days of notice being given. 

Mr Couture resigned and was put on garden leave for the whole of his 12 month contractual notice period. Jump notified Mr Couture that it would impose the non-compete covenant for the full 12 months. Mr Couture told Jump that this was not acceptable.  On the same day, his prospective employer, Verition Advisers UK Partners LLP, was given legal advice that the non-compete clause was unenforceable. 

Nearly four months after his resignation, Mr Couture told Jump that he intended to join Verition.  Protracted without prejudice discussions culminated in Mr Couture writing to Jump, on an open basis, confirming that he did not consider the restriction to be enforceable, that he intended to join Verition to set up a new investment team, that he would not be trading for the first twelve months at least, and that he did not believe the activities in which he would be engaged in this time would be in competition with Jump. 

Four months later, after no further communication, Jump replied to Mr Couture, confirming its view that he would be in breach of the covenant. It also wrote to Verition.  After further correspondence, Jump brought proceedings against Mr Couture, applying for an interim injunction to prevent Mr Couture working for Verition pending trial. It also brought a claim against Verition for inducing Mr Couture's breach of contract. 

Mr Couture argued in the High Court that the uncertainty about the length of the covenant meant that the clause was unenforceable.  He also argued that 12 months was unreasonably long in view of the 12 month garden leave period and that the covenant was too wide in scope. 

The High Court refused the interim injunction. It held that, although the covenant was wide and long, it was not so clearly unreasonable that the court could conclude that there was no serious issue to be tried. However, there had been significant delay by Jump, including the gap of four months after Mr Couture had notified Jump of his intentions in relation to working for Verition for which there was no explanation. This unreasonable delay, the High Court held, meant that the interim junction would be refused. 

The High Court also held that there was no serious issue to be tried against Verition: it had acted on legal advice that the covenant was probably unenforceable. This was sufficient to defeat a claim for inducement to breach of contract. 

What does this mean for employers?

This case highlights the importance of employers of moving swiftly to enforce restrictive covenants without unreasonable delay.

Verition Advisors (UK Partners) LLP v Jump Trading International Limited