Green v Ashco Horticultural Ltd [1966] 1 WLR 889 (CA)

Facts

• Mr. Green was employed as a manager at Ashco Horticultural Ltd.
• His employment contract included a post-employment restrictive covenant preventing him from working in horticulture within a specified region for two years after leaving the company.
• Mr. Green’s role involved both specialized and general tasks, including hands-on and supervisory duties.
• After resigning from Ashco, Mr. Green joined a competing horticultural company.
• Ashco sought an injunction to enforce the restrictive covenant against Mr. Green.

Issues

1. Whether the restrictive covenant was reasonable in scope, duration, and geographical area in relation to Mr. Green's actual duties.
2. Whether the restriction protected legitimate business interests, such as trade secrets or customer relationships, without unduly limiting Mr. Green’s ability to obtain future employment.
3. Whether a covenant covering all horticultural roles, regardless of Mr. Green’s actual exposure to confidential information or customer ties, was enforceable.

Decision

• The Court of Appeal held that the restrictive covenant was unenforceable.
• The court found the restriction overly broad, as it prevented Mr. Green from engaging in any horticultural role, including those unrelated to his position at Ashco.
• Since Mr. Green's duties were varied and not solely specialist, the covenant was deemed unreasonable and not necessary to protect Ashco’s legitimate business interests.
• The clause was considered to inhibit Mr. Green’s right to work in areas where he posed no threat to Ashco’s business.

Legal Principles

• Restrictive covenants in employment contracts must be tailored to the specific nature and scope of the employee’s actual duties.
• Clauses that extend beyond protecting legitimate business interests, such as trade secrets or key customer relationships, are likely to be invalid.
• The reasonableness of a restrictive covenant depends on its alignment with the employee's real exposure to confidential information and the legitimate needs of the business.
• Broad industry-wide restrictions are rarely enforceable where the employee's role was limited or varied.

Conclusion

The case illustrates that post-employment restrictions must precisely reflect the employee’s actual responsibilities and exposure to confidential business matters. Restrictive covenants that are overly broad or not matched to legitimate business interests will likely be held unenforceable by the courts.