non-solicitation clause

The High Court of England and Wales has considered the construction of non-solicitation clauses where the former client initiated contact with the ex-employee. In Baldwins (Ashby) Limited v Andrew Maidstone (PDF), the Court held that the substance of what passes between the parties will determine whether there has been a breach of a non-solicitation clause and that how contact is first initiated is not relevant. The case is a useful reminder of the value of including non-dealing restrictions in addition to non-solicitation provisions in commercial agreements and employment contracts.

What happened in this case?

The defendant, Mr Maidstone, sold his accountancy business to the Claimant (Baldwins (Ashby) Limited) for approximately £1m in September 2007. Following the sale of the business Mr Maidstone was employed by Baldwins until November 2009, when he moved to a firm called Charnwoods. The sale agreement contained a three year covenant protecting the goodwill in the company from Mr Maidstone ‘canvassing, soliciting or endeavouring to entice away’ any of his former clients. Baldwins brought proceedings against Mr Maidstone alleging that he was in breach of this covenant.

Continue Reading When accepting business from former clients breaches a non-solicitation covenant under UK law