Ryanair loses legal action against Peter Bellew

Judge dismisses effort to hold departing executive to non-compete agreement

Peter Bellew, who won his action forcing Ryanair to allow him work for rival EasyJet. Photograph: Collins Courts

Peter Bellew, who won his action forcing Ryanair to allow him work for rival EasyJet. Photograph: Collins Courts

 

Ryanair’s departing operations chief Peter Bellew can join the company’s arch-rival EasyJet after a High Court judge dismissed Ryanair’s efforts to block the move.

Mr Justice Senan Allen held that a clause in the operations executive’s contract restraining him from working for another airline for 12 months is unenforceable.

Giving his ruling on Monday, he said Ryanair had sought to compel Mr Bellew to comply with a covenant that he would not join a competitor for a year following termination of work with Ryanair. While Ryanair had proved a legitimate interest in exacting the covenant from Mr Bellew, it went beyond what Ryanair had shown to be justified.

After the ruling, Ryanair said it had instructed its lawyers to immediately appeal.

The judge said the covenant at the heart of the case would prevent Mr Bellew from taking up employment with any European airline and Ryanair had not shown how its interests should extend beyond those airlines in direct competition with it in the low cost or low fare sector to those operating in the flag or high cost sector.

Covenant

Mr Justice Allen said the legitimate interest of Ryanair in restraining Mr Bellew from taking up alternative employment was limited to roles which would risk the disclosure or use of its protectable information.

“I find that the restraint on employment in any capacity goes beyond that interest and has not been shown to be justifiable,” he said. “I find that the covenant to which the defendant [Mr Bellew] for valuable consideration freely agreed is, as a matter of law, void and unenforceable as an unjustified restraint of trade.”

In dismissing Ryanair’s legal demands that Mr Bellew be restrained by the covenant he signed, Mr Justice Allen found that Mr Bellew was not unfairly or unreasonably treated by Ryanair boss Michael O’Leary in being excluded from participating in the 2019 round of share options.

But he also noted that “the commercial morality of [Mr Bellew’s] behaviour is not material to the construction of the clause or the application of the law”.

Ryanair had argued that Mr Bellew possessed information of competitive value and that he was bound by the covenant.

A former Malaysia Airlines boss, Mr Bellew denied he was subject to the covenant and planned to begin work with EasyJet in the new year after having completed a six-month notice period of his resignation from Ryanair.

Performance review

Over eight days of evidence, Mr Justice Allen had heard Mr Bellew considered himself “a dead man walking” following a March performance review and had resigned after having been ordered to work at Ryanair’s Austrian business.

Mr O’Leary in turn had denied he was trying to force Mr Bellew out, stating that if he had wanted him out, he would have removed him.

Mr Bellew, who claimed in court he had intended to stay at Ryanair until retirement, had finally decided to quit in July after having been made an offer by EasyJet. He claimed information he had regarding Ryanair’s operation would be of limited use to EasyJet because Ryanair operated in a unique way and disclosed its costs publicly in annual accounts.

Mr Bellew was in court for the ruling. He left immediately afterwards without making any comment.