Tom James UK Limited v Max Potter: High Court strikes down 12-month non-compete clause

The High Court has delivered a significant judgement on the enforceability of post-termination restrictive covenants in Tom James UK Limited v Max Potter [2025] EWHC 2873 (KB), finding a 12-month non-compete clause unenforceable for exceeding what was reasonably necessary to protect legitimate business interests.

Max Potter, a mid-level salesperson for the bespoke tailoring company, resigned in May 2025 after nearly eight years' employment. Tom James UK sought to enforce various restrictive covenants, including a 12-month prohibition on working in competition. At an interim hearing, Potter gave undertakings not to solicit customers or approach staff, but disputed the non-compete clause's validity.

Mr Justice Ritchie dismissed the claim entirely, finding no breach of contract and ruling the restrictive covenant unenforceable.

The Defendant had signed a 2017 contract containing six-month restrictive covenants with geographical and role-based limitations. In 2022, following pay negotiations, a new contract doubled the non-compete period to 12 months and removed the previous relief provisions. Critically, Potter was never informed of these changes, and the company failed to demonstrate any consideration of the employee's interests when expanding the restrictions.

The Claimant asserted that the extended covenant was necessary to protect confidential information, including sales methodologies, pricing strategies and customer relationships. However, the evidence revealed Potter had limited access to genuinely confidential business information beyond customer details, which he had returned on USB drives following his resignation.

Tom James relied heavily on customer buying cycles to justify the 12-month duration, producing various analyses suggesting average purchasing intervals of 8-12 months. The court rejected this justification, finding the analyses flawed through inclusion of outliers and inappropriate sample selections. More significantly, post-departure sales data showed replacement salespeople had successfully sold to 18% of Potter's customers within three months—close to the company's own 20% target—undermining claims that relationship-building required 12 months.

The Claimant further argued that non-solicitation covenants were difficult to police, necessitating the broader non-compete provision. Mr Justice Ritchie found this assertion unconvincing, noting that 52 salespeople had left during Potter's employment with no evidence presented about policing difficulties. The company's intimate knowledge of customers through detailed relationship management actually facilitated monitoring for solicitation breaches.

On scope, the covenant prevented Potter from working in "any Capacity" with competing businesses worldwide. This extended beyond his London-based role to encompass the American parent company and subsidiaries across 86 countries, covering not just bespoke tailoring but also off-the-peg garments and accessories. The court found no evidential justification for such breadth when Potter's core role involved face-to-face sales of made-to-measure suits in London.

The judgement emphasised fundamental principles: restrictive covenants must protect legitimate business interests and go no further than reasonably necessary, with employers bearing the burden of proof. The court must consider both parties' interests and the factual matrix at the contract's formation.

Regarding the breach allegations, Mr Justice Ritchie accepted Potter's evidence over the company's witnesses, finding conversations with customers and colleagues did not breach duties of fidelity or good faith. The judge was particularly critical of the company's aggressive post-resignation treatment, including hand-delivering threatening legal correspondence on a Sunday, which contributed to Potter's medically certified stress.

The decision reinforces judicial scrutiny of overly broad restrictive covenants and highlights the importance of evidencing reasonable necessity through contemporaneous documentation rather than retrospective justification.