Can US competes restrain an employee in England?

Listed US corporations often grant senior executives awards of stock options in exchange for non-compete obligations. These can be very valuable for the executive but if the employee is based in England, are they of any value to the employer?

Not necessarily. As the case of Duarte v Black and Decker Corporation and another [2007] EWHC 2720 (QB) makes clear, the English courts will always consider whether the non-competes would be lawful in England under English law principles. This is even if, as in Duarte, the original agreement was not under English law at all but, for example, the home state of the relevant US corporation.

This is another area where the US and UK are divided, not only by a common language but by common law. Many US states have a superficially similar approach to employee non-competes to English law. The doctrine of 'restraint of trade' is found on both sides of the Atlantic. However, it can be applied very differently, and much more restrictively, in England.

Wragge & Co's employment experts have compiled an analysis of the case and action points that will help you and your organisation.