Jeremy Clarkson’s leaving ‘Top Gear’ is a reminder to us of the importance of having in place protection to prevent employees from being able to damage the business interests of their ex-employer.
This month there are reports of a “legal hitch” preventing Clarkson and his former co-hosts from making a rival car show for two years with another British broadcaster. Whilst the press are reporting this as a “legal hitch” what they are of course referencing are restrictive covenants, and most likely a non-compete clause in Clarkson’s contract preventing him from competing with ‘Top Gear’.
The “stumbling block” in the reports is a two year restriction, covering all terrestrial British TV channels. This clause apparently came to light after Clarkson and his ex co-hosts were in discussions with ITV. There is talk of the ex ‘Top Gear’ presenters looking to get around the restriction, and mention of online channels (such as Netflix and Amazon) being excluded from the restriction as they are US based.
Restrictive covenants are quite common and to be expected nowadays in the employment contract. However employers can get caught out and the business will not be protected if the clause in the contract housing the restriction is not correctly drafted. A restrictive covenant will only be enforceable if it protects a “legitimate business interest”. This means the restriction must be reasonably limited in time and the geographical area “no wider than necessary”. If employers get the drafting wrong the restriction is likely to be deemed an unlawful restraint of trade and will not protect the business.
A lot could be at stake for the BBC with ‘Top Gears’ revenue reported at £40 million a year.
Healys Employment Team will shortly be circulating a guide on restrictive covenants to encourage employers to carry out a health check of their restrictive covenants. Please look out for this!
In the meantime if you have any queries please do get in touch (Allison Grant, Head of Employment at email@example.com)