Court Rules Against MTN's Restrictive Employment 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 MTN Nigeria Communications Limited's appeal 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 National Industrial Court's June 13, 2018 judgment, which found the four-year restrictive covenant imposed on Ikpa to be unreasonable. Ikpa's employment was terminated in December 2008 without the required notice, leading him to challenge the dismissal.

He argued that the restrictive clause effectively barred him from securing alternative employment. The National Industrial Court awarded him N5,101,674 as compensation and N100,000 in costs.

MTN's appeal claimed the court lacked jurisdiction and that the restraint clause was reasonable, but the appellate court found otherwise.