Court of Appeal rules on commission

On 17 April 2025, the Court of Appeal delivered a significant judgement in the case of X-R Touring LLP v. Joshua Javor & Anor, which addressed pivotal issues regarding employment contracts and the enforceability of commission provisions in post-termination scenarios. At the heart of the case was a dispute involving X-R Touring LLP, a concert booking agency, and former employee Joshua Javor who had transitioned to a new role at William Morris Endeavor Entertainment UK Limited (WME) after leaving X-R in August 2023.

The original ruling by Mr Justice Kerr on 13 March 2024 had seen X-R's claim to enforce commission rights against Javor struck out on the grounds that it lacked a realistic prospect of success. This ruling prompted X-R to appeal. The case primarily revolved around Clause 13 of Javor's employment contract, which outlined post-termination obligations including commission rights for bookings that were “discussed, scheduled, made or contemplated” prior to his departure.

The Court of Appeal’s scrutiny of the commission clause revealed substantial limitations imposed on Javor’s ability to pursue employment opportunities within the industry. Lord Justice Bean, who authored the leading judgement, articulated the argument that the clause acted as a disincentive for employees to seek other employment, invoking the restraint of trade doctrine. He identified that the clause was excessively broad and went beyond what was necessary to safeguard X-R's legitimate business interests.

Further, the judgement emphasised the necessity for employers to draft commission clauses that are reasonable and proportionate, ensuring they do not overly restrict an employee's future career prospects. Lord Justice Bean specifically pointed out that X-R had not sufficiently demonstrated the legitimate business interests needed to uphold such a sweeping clause.

The appeal ultimately led to the decision to allow X-R's case to proceed, indicating that the commission provision's breadth could render it unenforceable, thus warranting further examination at trial. This moment marks a critical point in the balance between enforcing contractual obligations and protecting employee rights, reinforcing the courts' role in safeguarding against overly restrictive employment conditions.

The judgement stands as a vital reference for future disputes involving commission clauses within the employment sector, especially within the dynamic context of the music and entertainment industry. As the complexities of employment law continue to evolve, the X-R Touring LLP v. Joshua Javor case exemplifies the ongoing challenges of navigating post-termination restrictions while maintaining equitable professional relations.

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