Appeal Court Rules Against MTN's Restrictive Clauses

The Court of Appeal, Lagos Division, ruled that employers cannot impose unreasonable post-employment restrictive covenants to prevent former employees from earning a living. This decision came in response to an appeal by MTN Nigeria Communications Limited against a judgment awarding N5.1 million to its former Procurement Manager, Mr.

Theodore Nwabueze Ikpa. The unanimous judgment, delivered by Justice Danlami Zama Senchi in Appeal No.

CA/LAG/CV/319/2021, upheld the June 13, 2018 judgment of the National Industrial Court, which found the four-year restrictive covenant in Ikpa's contract unreasonable and unlawfully restrictive. Ikpa's employment was terminated in December 2008, and he contended that MTN did not provide the required notice.

He sought declarations regarding the unlawfulness of his termination and compensation for the restraint of trade clause. The National Industrial Court awarded him N5,101,674 and N100,000 in costs.

MTN's appeal argued the restraint was reasonable for protecting business interests, but the appellate court found the trial court's jurisdiction and evidence evaluation were proper.