The courts have blown hot and cold about how far it is possible
to sever a covenant that goes beyond what is reasonably necessary
in order to make it enforceable. In Tillman v Egon Zehnder
Ltd the Supreme Court confirmed that severance is possible if
three conditions are met.
Ms Tillman was employed as a senior recruitment consultant. She
had agreed not to "directly or indirectly engage or be
concerned or interested in any business carried on in competition
with" her employer for six months after the termination of her
employment. After she resigned, she wanted to go and work for a
competitor before the end of the six month period.
When Egon Zehnder applied for an injunction to prevent this, she
argued that the covenant was unenforceable because the reference to
being "interested" in any business would stop her from
holding a minority shareholding in a competing business. This went
beyond what was necessary to protect the employer's legitimate
business interests.
