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A restrictive covenant which was unreasonable when first imposed cannot become reasonable at a later date as a result of a change in circumstances of the employee. Nor does a provision that the employer will pay the employee during the period of the restriction make that restriction reasonable.
T’s contract contained a restrictive covenant which prevented him from dealing with any customer of his employer. He was only a trainee at the time so this was considered to be far wider than necessary to protect any legitimate interest of the employer. It was therefore unreasonable. 20 years later, although he then had considerably more dealings with customers, the covenant was still unenforceable because it had been unenforceable when it was originally imposed. In any case, the court held, the clause was unreasonable since it prevented him from dealing with any customer of the employer, whether or not he personally had any dealings with that customer. A provision that the employer would pay T during the period of the restriction did not make the clause reasonable.
Authoritative analysis of the rules governing termination of employment provides coverage of the...