Unreasonable contract terms

Case 12: The facts

Three employees were dismissed for refusing to sign new contracts that contained clauses restricting the kind of work they could do if they left.

Their employer had asked them to sign the contracts after it became aware that they were considering working with a new company in direct competition.

The ruling

The Employment Appeal Tribunal (EAT) held that the restraint clause was too wide, as it was for 12 months and covered the whole country. It can be fair to dismiss an employee for refusing to sign a restraint clause, but the EAT said it was unreasonable to expect employees to sign a clause that was unfairly wide. In this case the dismissals were unfair.

Forshaw v Archcraft Ltd and others UKEAT/0677/04