Huws Gray Ltd v Gentleman – Restrictive Covenants – Non-Compete Gone Wrong
Non-Compete Gone Wrong
The Facts
Mr Gentleman was a salesman who managed relationships with 100+ customers for Huws Gray. He resigned and joined a direct competitor in another senior sales role. Huws Gray tried to enforce the non-compete. The High Court said no.
Why It Failed
Failed
- Too wide. The clause blocked Gentleman from ANY role with a competitor.
- Undefined terms. “Restricted Customers” and “Restricted Potential Customers” were never properly defined.
- Applied from day one. The restriction applied from day one of employment — even during a probation, before any customer relationships existed. Despite Gentleman’s years of service, the court saw this as proof the covenant was drafted without regard to when the risk actually arose.
Lessons for HR
A covenant should map to the specific threat a role poses – not the broadest restriction you can get away with.
A covenant is only as good as its definitions. If “Restricted Customer” isn’t tied to a defined list or clear criteria, the contract itself hasn’t done its job, and no court will read in scope that was never written down.
