Stopping Ex-Employees From Working for Competitors: What Does the Law Say?

A High Court ruling in X-R Touring LLP v Joshua Javor and William Morris Endeavor Entertainment (U.K.) Limited has raised questions surrounding the scope and enforceability of a restrictive covenant when an employee begins working for competitors.

In this case, Mr Javor’s employment contract included a 12-month non-solicitation clause that covered employees, clients, and entertainment artists. X-R Touring LLP (X-R) contended that this clause was breached when William Morris Endeavor Entertainment (U.K.) Limited (WME) released a press statement announcing Mr. Javor’s hiring.

Below, we explore the unfolding events and examine why this case is unique. We discuss the High Court’s decision and what impact it could have going forward. 

If you have any questions or issues concerning restrictive covenants, please don’t hesitate to contact us. Redmans Solicitors have years of industry experience, allowing us to provide specialist advice to navigate your problem.

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Press Release Sparks Legal Battle Over Non-Solicitation Clause and Working for Competitors

Joshua Javor began working as a booking agent with X-R, the global music agency, in 2008. During his employment, he enjoyed a successful career working with household names such as Coldplay and Eminem.

However, on 16 May 2023, Mr Javor verbally communicated his decision to leave X-R. The following day, he confirmed his notice of resignation via email and signed a contract of employment with WME the day after. Mr Javor then worked his notice period, which ended on 17 August.

Unfortunately, during Mr Javor’s final months of employment with X-R, things became uneasy between the parties. For example, on 19 July, Mr Javor’s solicitor corresponded with X-R, stating that he “does not agree to be gagged”. Additionally, due to Mr Javor’s increasingly “reluctant” behaviour, X-R became weary of his compliance with their non-solicitation clause when working for competitors.

Things came to a head on 16 August when WME released a press statement about hiring Mr Javor. Comprised within, WME stated that he had joined “as Partner and co-head of London’s music department”. They also outlined many of the artists Mr Javor had worked with, naming 32 in total.

When X-R became aware of several online news stories, its solicitors complained. They believed these articles evidenced a breach of their non-solicitation covenant. Consequently, on 6 September, X-R initiated legal proceedings, seeking damages for the breach of their post-employment restrictions concerning working for competitors.

High Court Rules Case is Fit to Proceed to Trial

In a High Court judgment dated 13 March 2024, it was held the case was “fit for trial and should proceed”. To begin, they dismissed arguments that the restrictive covenant concerning non-solicitation was unenforceable. “There is an issue fit for trial as to whether the non-solicitation covenant is enforceable”, they stated.

Moving on, they believed X-R could show a breach of their restrictive covenant, providing “a real prospect of success at trial”. Firstly, they appreciated Mr Javor’s seniority with his former employer, allowing him access to high-profile individuals. Couple this with his reluctance following his notice of resignation, and suspicions could well arise.

What’s more, they highlighted that WME’s press release predated Mr Javor’s final day. They discussed how the publication’s wording mentioned that he “has joined”, which wasn’t correct and was potentially misleading.

Additionally, they discussed how the press release may be seen as an appeal for custom. They stated, “If the request is powerful enough, it could amount to an act of solicitation even if it is not expressed as such in so many words”. They added, “The question should be one of substance, not form”.

As such, the High Court outlined how the press release could amount to solicitation. This included WME mentioning the high-profile artists Mr Javor had worked with and his statement that he would continue the legacy of work he’d previously completed with X-R.

Working for Competitors: Potential Implications for Restrictive Covenants

What makes this case unique, though, is its indirect nature. After all, the press release didn’t come from Mr Javor, having instead been published by his new employer. The High Court stated, “A possible sub-issue is whether solicitation must be “direct” or may… be indirect”. They discussed how, if the press release served as a solicitation of X-R’s artists, it’s evident that WME actively endorsed this. Therefore, as mentioned, they felt the case was fit for trial.

Should X-R succeed with their claim, the world of restrictive covenants could change substantially. Currently, it’s common for companies to issue press releases when they hire high-profile individuals with industry-recognised backgrounds. However, if X-R wins, solicitors may begin looking at such publications for breaches of post-employment restrictions.

As a result, the ruling could make companies think twice about publicising new employees going forward. Said employers would need to look at the enforceability of such restrictive covenants when working for competitors before doing so. They would also need to word any publication carefully to ensure it doesn’t breach an enforceable clause.

Get Help with Redmans

We hope you enjoyed this insight into the recent non-solicitation case. If you have any questions about working for competitors or restrictive covenants, like a non-compete clause, contact us today. Redmans Solicitors have years of experience in the sector, meaning we can provide specialist advice following a consultation.

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