It is not every day we get the pleasure of a Judgment on the enforcement of post-termination restrictions as most cases tend to settle before getting to a final hearing. However, the financial services sector once again finds itself at the heart of a recent case.

Background

The High Court has provided Judgment in the case of Dare International Ltd v (1) Stephen Soliman (2) Ashley Hikmet [2025] EWHC 227 (KB) where they had to consider the enforceability and enforcement of post-termination restrictions. This case is particularly interesting as it looked at circumstances where the two individuals were on sick leave for their notice periods.

The two individuals involved, Stephen Soliman (SS) and Ashley Hikmet (AH), were senior traders at Dare International Ltd (Dare) a proprietary trading company in the energy derivatives market.

Both individuals resigned in close proximity to one another in order to take up a role with one of Dare’s competitors, Onyx Capital Management Limited.  Both individuals were subject to:

• a 12 month notice period
• a 12 month non-compete restriction
• a 12 month non-solicitation of customers restriction
• a 12 month non-dealing with customers restriction
• a 12 month non-poaching of employees restriction.

Dare commenced proceedings against SS and AH to enforce the restrictions against both individuals.

Following their respective resignations both SS and AH were required to work their 12 month notice period but each of them went on sick leave for the entirety of the period. SS’s reasoning was an existing chronic condition, and AH was off sick with stress. Dare challenged the authenticity of the respective absences.

The Decision

As a reminder the starting point when looking at the enforceability of post-termination restrictions is that they are void for being in restraint of trade and contrary to public policy, unless the employer can show the relevant provision goes no further than reasonably necessary to protect a legitimate business interest.

The key focus, as is often the case, was on the non-compete restriction as this is the most draconian and restrictive provision. To this extent, due to the shelf life of the confidential information that Dare was seeking to protect, the Court found that a 12 month period was reasonable in the circumstances and accordingly would be enforceable.

However, they came to two different outcomes for the individuals when considering the granting of injunctive relief. They found that SS was suffering from a genuine health issue and as he had been out of the market with no access to the relevant confidential information for 12 months already they would not grant injunctive relief.

By contrast, the Court did grant injunctive relief against AH. The reason for the different treatment is that whilst he was also off sick for the duration of his notice period, they found that the absence was not genuine, he refused to work during his notice period and whilst off sick he had carried out preparatory work for Onyx. They also found that AH had accessed and disclosed confidential information to Onyx and continued to meet with brokers.  

The Court found the remainder of the restrictions went further than reasonably necessary to protect the interests which Dare sought to rely upon and as such did not grant injunctive relief in respect of the same.

Summary

This case serves as a helpful reminder of:

• the principles that the courts will apply when considering the enforceability of restricitons.
• the impact a period of absence may have on restrictions and injunctive relief i.e. sickness absence or garden leave.
• the fact a 12 month non-compete may be considered enforceable provided the necessary test is met.

It is also interesting to see how this will impact employees’ resignations moving forward and whether there will be a general increase of employees going onto period of sickness absence if notice periods are enforced. This had certainly been the case for Dare following the resignation of SS. However, to be successful in doing so, it would appear at the very least an employee would need to demonstrate via medical evidence that it is in fact a genuine sickness absence. Without this such arguments are unlikely to be successful or at least subject to real challenge by their employer.

If you have any questions in respect of the post-termination restrictions and their enforcement please do get in touch with one of our Employment team.