The High Court has refused an injunction, damages and other relief sought by Levinwick Limited against former pharmacy manager Patrick Hollingsworth over a 24-month restriction on working within two miles of Blakes Pharmacy in Celbridge.
In a judgment delivered on 4 July 2014, Mr Justice Brian J. McGovern held that the company had not established that Mr Hollingsworth’s role and work at the pharmacy gave him a personal connection with customers strong enough to make the restriction necessary to protect its goodwill.
The dispute concerned a clause in Mr Hollingsworth’s 2007 employment contract. It barred him for 24 months after leaving from working in, managing or owning a pharmacy or certain other retail businesses within two miles of Blakes Pharmacy. The clause also contained customer and staff non-solicitation terms. The company was not alleging that he had breached those terms, taken trade secrets or taken business plans, the judgment said.
Levinwick argued that customers would follow Mr Hollingsworth to another pharmacy because of his position as manager. An accountant called by the company attributed 75% of a decline in Blakes’ business to his move and said the manager would be seen as the pharmacy’s “face”. Another accountant’s review found turnover had fallen 26.55% from 2009 to 2013.
The judge accepted evidence that the pharmacy faced other pressures, including more pharmacies in Celbridge and reduced prescription fees. The decline in turnover had begun within two years of Mr Hollingsworth starting at Blakes, where he worked from August 2007 until March 2013.
Mr Hollingsworth’s evidence was that his work was largely administrative and that other pharmacists and staff had more customer contact. The judge found the evidence fell “a long way short” of establishing that customers identified him as the face of the pharmacy. The company did not use patient records to establish whether customers had followed him to other pharmacies, and did not show that a less onerous restriction would be impracticable.
The court also considered when his employment ended. The company argued that three months’ notice meant it ended on 30 April 2013. Mr Hollingsworth said an earlier departure had been agreed. The judge held that the agreed cessation date was 6 March 2013, explaining that his final pay documents reflected payment in arrears.
The judgment says restraints on former employees are enforceable only where they protect a legitimate business interest and are no wider than reasonably necessary. The court concluded that Levinwick had not met that test and was not entitled to the relief claimed.