Ryanair and Bellew’s court battle could impact all non-compete clauses

Airline hopes to stop outgoing COO from joining Easyjet – other lawyers will take note

Ryanair uniform, detail. Photograph: Reuters/Francois Lenoir/File Photo

Ryanair uniform, detail. Photograph: Reuters/Francois Lenoir/File Photo

 

Some observers believe the reverberations of Ryanair’s pending legal battle with outgoing chief operations officer, Peter Bellew, could be felt well beyond the airline.

Bellew is due to join Ryanair’s arch rival, Easyjet, as chief operating officer in January. The Irish carrier has gone to the High Court to stop him, claiming that his contract includes a non-compete clause barring him from joining any rival for one year after he leaves Ryanair. Bellew contests this.

The hearing kicks off on Tuesday. The prospect of both Ryanair chief executive Michael O’Leary and Bellew taking the stand has some hoping sparks will fly, but some lawyers will be watching because there is a suggestion that the case could have ramifications for all non-compete clauses.

On the face of it, non-compete clauses should pass legal muster. Both parties, wealthy companies on one side,well-paid executives on the other, enter them freely. On the basis that each side knows what is in their own best interest, there would have to be a very good reason for a court to unwind such a deal.

Both sides in the Ryanair and Bellew case clearly believe that the law favours them. O’Leary has said all the airline’s executives and senior managers, himself included, have non-compete clauses ruling them out of joining rivals for 12 months after they leave the company.

Nevertheless, Bellew contests this, and, given that he agreed to join Easyjet, must have had good grounds for believing that his Ryanair contract allowed him do so.

So this case is likely to boil down to the detail of the contract and the clause itself and what each side believes it says. If nothing else, it will mean an interesting end to the year for Ryanair and Bellew, not to mention a host of employment law practitioners.

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