IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA

IN THE LAGOS JUDICIAL DIVISION

           HOLDEN AT LAGOS

BEFORE HIS LORDSHIP HON. JUSTICE (PROF) ELIZABETH A. OJI

 

DATE: MONDAY 12TH OCTOBER 2026           SUIT NO: NICN/LA/12/2023

 

BETWEEN

BOECKER PUBLIC HEALTH SERVICES LIMITED            CLAIMANT

AND

BAYODE JOSEPH OLUSUNDE                                                             BEST PEST EXTERMINATORS LIMITED                                     DEFENDANTS

 

Representation:

Emmanuel Bwala for the Claimant

Mamode Ogbewele for the Defendants

 

JUDGMENT

Introduction and Claims:

1.  The Claimant commenced this suit by filing a General Form of Complaint dated 12th January, 2023 and Statement of Facts also dated 12th January, 2023. The Claimant claims against the Defendants jointly and severally as follows:

 

a.                 A DECLARATION that the 1st Defendant is in breach of the non-competition undertaking dated the 28th day of November 2018 executed in favour of the Claimant by the 1st Defendant pursuant to the 1st Defendant’s contract of employment dated the 28th day of November 2018.

b.                 A DECLARATION that the 2nd Defendant induced and promoted the breach of the post-employment obligations by the Claimant by retaining the 1st Defendant in its employment in breach of the post-employment obligations of the 1st Defendant

c.                  The sum of N20, 000, 000. 00 (Twenty Million Naira) as special damages to the Claimant pursuant to breach of the post –employment contractual obligations by the 1st Defendant

ALTERNATIVELY

General damages in the sum of N20, 000, 000. 00 (Twenty Million Naira)

d.                 Cost of the suit.

 

2.  In opposition to the Claimant’s Claims, the Defendants filed their Statement of Defence and Counter Claim dated 16th day of February, 2023 wherein, they denied the Claimant’s allegations and counter claims as follows:

(a)     A DECLARATION that the Non-Compete term signed by the 1st Counterclaimant on the 28th November, 2018 merely cover only the period within which the 1st Counter Claimant worked in Claimant Company and not thereafter.

(b)     A DECLARATION that the non-compete term signed by the 1st Counterclaimant on the 28th November, 2018 expired on 28th November 2021 by calculation and the 1st Counter Claimant having left the Claimant Company on 10th March, 2022 is discharged from the restraint clause in the Non-compete Agreement/Contract of Service dated 28th November 2018 signed by the 1st Counter Claimant pursuant to the employment of the Claimant’s Company

Or

A DECLARATION that the Non-Compete Clause in the Contract of Service signed by the 1st Counterclaimant on the 28th November, 2018 in favour of Claimant is unreasonable, oppressive and contrary to public policy and same cannot be enforced against the 1st Counterclaimant having expired.

(c)    A DECLARATION that the 2nd Counterclaimant having not being a party, to the contract of service Agreement cum Non-compete agreement of 28th November, 2018 between the 1st Counterclaimant and the Claimant, the Claimant has no cause of action against the 2nd Counterclaimant.

(d)     Damages in the sum of N1, 000, 000 (One Million Naira) for his unpaid performance bonus

(e)     General damages in the sum of N5, 000, 000. 00 (Five Million Naira)

 

3.  In response to the foregoing, the Claimant filed Reply to the Defendants’ Statement of Defence and Defence to Counter Claim” dated 4th day of April 2023.  Trial commenced on 7th July 2023.  The Claimant called Adebimpe Popoola (CW) who adopted her two Witness’s Statements on oaths sworn to on the 12th January 2023 and 4th April 2023 respectively. The Claimant’s witness was subsequently cross examined.  In the course of testimony, CW tendered six documents marked Exhibits C1 to C6 as follows:

 

a.       Employment Offer                                                        Exhibit C1

b.       Confidentiality Undertaking                               Exhibit C2

c.       Non-Competition Undertaking                                    Exhibit C3

d.       Profile of the 2nd Defendant                                Exhibit C4

e.       Letter dated the 28th day of November 2022                Exhibit C5

f.        Letter date the 9th day of December 2022                     Exhibit C6

 

4.  The Defendants called Bayode Joseph Olusunde (DW1) who adopted his Witness’s Statement deposed to on the 16th day of February 2023, as his evidence in chief. In the course of his testimony, DW1 tendered 3 documents which were admitted and marked as Exhibits D1 to D3:

a.       Offer letter dated 28th November, 2018                        Exhibit D1

b.       Resignation letter vide email dated 10th March 2022   Exhibit D2

c.       WhatsApp correspondence dated 10th March 2022     Exhibit D3

 

5.  The Defendants also called Efe Enejeta, Human Resource Manager (DW2) who adopted his Witness’s Statement deposed to on the 16th day of February 2023, as his Evidence in Chief.  Both Defence witnesses were cross examined.

THE CASE OF THE CLAIMANT

6.  The Claimant's case is that the 1st Defendant, its former employee, breached a Confidentiality and Non-Competition Undertaking signed on 28 November 2018 by taking up employment with the 2nd Defendant, which the Claimant says is its direct competitor operating in the same territory.  The 1st Defendant was employed as a Technical Engineering Officer/Operation Officer by virtue of letter of employment dated the 28th day of November 2018 and was exposed to the Claimant's trade secrets, business methods, client information, technical know-how, and operational systems.  As part of his employment, he signed both a confidentiality undertaking and a non-compete clause restraining him, for 3 years and within territories where the Claimant or its affiliates operate, from working in a similar field or transferring the Claimant's know-how.  Despite that undertaking, the 1st Defendant secretly joined the 2nd Defendant.  The 2nd Defendant is in the same line of business as the Claimant and is benefiting from the 1st Defendant's training, skills, and insider knowledge acquired at the Claimant's expense.  After being notified by the Claimant's solicitors, the 2nd Defendant failed to disengage the 1st Defendant and thereby encouraged or induced the breach. 

THE CASE OF THE DEFENDANTS

7.  The Defendants state that the 1st Defendant having worked in the Claimants company for close to four years before his resignation, the Non-competition Agreement of 28th November, 2018 between him and the Claimant being a restraint of trade within the period of his employment has expired and has now become null and void and of no effect.  That the non-compete clause in the 1st Defendant’s Contract of Service Agreement of 28th November, 2018 which expired in November 2021 is unreasonable and oppressive.  The Defendants aver that the Claimant did not offer any special training to the 1st Defendant through which he may acquire any special skill, technical knowledge that is capable of being transferred to companies or organization in similar fields of operation like the Claimants.  That assuming without conceding that the Non-Compete clause in the 1st Defendant’s Contract of Service Agreement of 28th November, 2018 is valid and inures even after the employment of the 1st Defendant in the Claimant’s company, the Claimant cannot get benefit thereof because it did not give consideration, compensation for such restraint either before, during or after the employment and the 1st Defendant can work anywhere he chooses after cessation of his employment with the Claimant.  The Defendants avers that the 1st Defendant does not have access to the Claimants trade secrets, future plan and confidential information and that the subsequent employment of the 1st Defendant by the 2nd Defendant is not in breach of non-compete clause in the Contract of Service Agreement dated 28th November, 2018 and also that being a restraint same is in the circumstance of this case unreasonable oppressive, injurious and offends public policy.  The Defendants aver that the 2nd Defendant only became aware of the facts relating to the said Non-Compete Agreement in this suit when the Claimant forwarded its letter dated the 28th day of November 2022 to the 2nd Defendant.  The Defendants aver that the 2nd Defendant was surprised and embarrassed when it received the Claimant’s letter dated the 9th day of December 2022 where the Claimant unreasonably demanded that the 2nd Defendant terminate the employment of 1st Defendant in its company.  The Defendants aver that the Claimant unjustly, unreasonably and disrespectfully attached the profile of the 2nd Defendant to the documents in this suit with the aim of sullying the good name of the 2nd Defendant in the public light.  The Defendants aver that the 2nd Defendant is not a party to the Service Agreement between the Claimant and the 1st Defendant and that the Claimant was merely embarking on gold digging venture by joining the 2nd Defendant into this action.  The Defendants in counterclaim aver that before the 1st Defendant’s resignation from the employment of the Claimant, he was entitled to annual performance bonus and medical insurance which is given annually which were not paid.  The Claimant refused to pay the 1st Defendant the annual performance bonus and medical insurance which he was entitled to.  The Defendants' position is that the restraint clause cannot stop the 1st Defendant from taking a new job after leaving, the 2nd Defendant is a stranger to that contract, and the Claimant is the party actually owing the 1st Defendant money.

 

CLAIMANT’S REPLY TO THE STATEMENT OF DEFENCE

8.  In reply, the Claimant states that the non-compete undertaking signed by the 1st Defendant on 28 November 2018 was meant to operate after the employment ended, not only during employment; it would make no sense to say the restraint applied only during employment, because the contract did not contemplate the 1st Defendant working for another employer while still in the Claimant's service; the 1st Defendant resigned in breach of his employment terms, allegedly without giving the required one month's notice; the non-compete clause is reasonable, fair, and necessary to protect the Claimant's investment in the 1st Defendant and its business interests; the 1st Defendant, as a Technical Engineering Officer/Operations Officer, held a sensitive position, had contact with clients, gained valuable experience, and had access to the Claimant's trade secrets and confidential business information.  The Claimant says this access and exposure amount to sufficient consideration for the post-employment obligations; the 1st Defendant has allegedly breached both the non-compete and confidentiality obligations by using or transmitting the Claimant's business knowledge to benefit the 2nd Defendant; the 2nd Defendant became aware of the restriction, and after making inquiries through its HR officer, still continued to retain the 1st Defendant in employment; because of that, the 2nd Defendant is said to be a necessary party and to have induced or collaborated in the breach.  In response to the Defendants' counterclaim, the Claimant says that: the 1st Defendant resigned abruptly in a way that was unfair and harmful to the Claimant; the 1st Defendant is not entitled to annual performance bonus or medical insurance; the alleged claim for bonus and insurance was never raised at the time of resignation and is therefore an afterthought; the counterclaim is frivolous, baseless, and a gold-digging exercise.

DEFENDANTS' SUBMISSIONS

9.  The Defendants submit that the Claimant's action is misconceived, unmeritorious, and liable to be dismissed in its entirety. The foundation of the suit is the alleged breach of a Non-Competition Undertaking dated 28 November 2018 executed by the 1st Defendant during his employment with the Claimant. The Defendants contend that the said covenant is unenforceable in law, unreasonable in scope and duration, unsupported by credible evidence of breach, and incapable of grounding liability against the 2nd Defendant.  The Defendants further submit that the Claimant has failed to discharge the burden of proof placed on it in civil proceedings, while the Defendants have established their counterclaim and are entitled to the reliefs sought therein.

10.  The Defendants formulates the following issues for determination:

1.       Is this suit as constituted valid in the light of Section 68 (e) of the Federal Competition and Consumer Act 2019?

2.     Whether based on the facts and evidence adduced in this case, the Claimant has proved its case on the preponderance of evidence as required by law to be entitled to the reliefs sought?

3.      Whether the Defendants have established and proved their Counter Claim?

11.  One issue one; the Defendants submit that the present action is predicated entirely on a restrictive covenant, namely the Non-Competition Undertaking allegedly executed by the 1st Defendant in favour of the Claimant. In law, covenants in restraint of trade are prima facie unenforceable unless shown to be reasonable as between the parties and consistent with the public interest. Reliance is placed on Andreas I. Koumolis v. Leventis Motors Ltd (1973) 11 SC 100 and Dr. Shinsh Tanksale v. Rubee Medical Centre Ltd (2013) LPELR-21445 (CA).  The Defendants further contend that the relevant statutory regime is the Federal Competition and Consumer Protection Act 2019. By section 1 FCCPA, one of the objectives of the Act is to prohibit restrictive and unfair business practices which prevent, restrict or distort competition. More specifically, section 68(e) FCCPA permits restrictive clauses in contracts of service only to the extent that the restriction, whether during or after termination, does not exceed two years.  The covenant relied upon by the Claimant imposes a restraint for three years. The Defendants therefore argue that the covenant is inconsistent with section 68(e), void, contrary to public policy, and unenforceable. On that footing, the Claimant's suit, being anchored on the enforcement of an invalid covenant, is said to be not maintainable and liable to dismissal.  The Defendants also argue in the alternative that, even on the wording of the clause itself, the three-year period ran from 28 November 2018 and had already expired before the alleged breach occurred.

12.  One issue two; the Defendants submit that the Claimant has failed to prove its case on the balance of probabilities as required by section 134 of the Evidence Act 2011. Reliance is placed on Health Care Products Nigeria Ltd v. Bazza (2004) 3 NWLR (Pt. 861) 582 at 605-606.  The Claimant, to succeed, must prove:

  • that the restraint is reasonable and enforceable;
  • that the 1st Defendant actually breached it;
  • that the 2nd Defendant knowingly induced or promoted such breach; and
  • that the Claimant suffered loss entitling it to damages.

 

13.  The Defendants argue that the Claimant failed to establish any legitimate proprietary interest warranting protection by a restrictive covenant. While the Claimant alleged exposure of the 1st Defendant to trade secrets, trade data, know-how, training, and confidential business information, no credible evidence was led to identify; the actual trade secrets, the specific confidential processes, the 1st Defendant's access to such information, or how any such information was deployed to the benefit of the 2nd Defendant.  On this point, the Defendants rely on C.F.A.O. v. George Lilbro (1918) 3 NLR 67, where the Court held that a party seeking to enforce a restraint must show that the employee had access to trade secrets and was in a position to disclose them to a rival. They also rely on Newbreed Organisation Ltd v. J.E. Erhomosele (2006) 5 NWLR (Pt. 974) 499 at 545 paras C-D, for the principle that pleadings unsupported by evidence are deemed abandoned.  The Defendants further argue that the covenant is unreasonable in its geographical scope, economic reach, and duration. They cite Infinity Tyres Ltd v. Mr. Sanjay Kumar & 3 Ors, NICN/LA/170/2014, judgment delivered 10 July 2018, where the Court held that reasonableness is assessed by reference to the geographical area covered, the economic activity restrained, and the duration of the restraint.

14.  Here, the covenant applies to all local and international territories where the Claimant or its affiliated, sister, or parent companies operate. The Defendants submit that this is excessively wide and oppressive. They also contend that the Claimant failed to clearly define the exact scope of its field of activity, thereby making the economic reach of the restraint vague and limitless.  The Defendants additionally rely on 7th Heaven Bistro v. Mr. Amit Desphande, NICN/LA/396/2018, judgment delivered 27 September 2018, for the proposition that the reasonableness test must balance the interests of the employer, the employee, and the public. They submit that the covenant, if enforced, would unduly deprive the 1st Defendant of his right to earn a living and would not serve the public interest in fair competition.  The Defendants submit that since the covenant is void, expired, or otherwise unenforceable, the mere fact that the 1st Defendant took employment with the 2nd Defendant cannot amount to breach. They argue that no valid post-employment restraint subsisted at the material time.  The Defendants contend that the 2nd Defendant was not a party to the contract between the Claimant and the 1st Defendant and cannot be fixed with liability for inducing breach. In any event, the 2nd Defendant only became aware of the alleged covenant after receiving the Claimant's letter. Since the underlying covenant is said to be invalid or unenforceable, there was no actionable breach capable of being induced.

15.  The Defendants then submit that the Claimant is not entitled to the declaratory or monetary reliefs sought.  First, declaratory reliefs are not granted as a matter of course; they must be established by credible evidence. The Claimant, in the Defendants' view, has failed to prove enforceability of the covenant, breach by the 1st Defendant, or inducement by the 2nd Defendant.  Second, the claim for N20,000,000.00 special damages, or alternatively general damages, has not been proved. The Defendants argue that no credible evidence of actual loss, injury, diversion of business, misuse of confidential information, or measurable damage was adduced. They therefore submit that the claim for damages is speculative and must fail.

Argument on Issue three.  The Defendants submit that their counterclaim has been proved and ought to be granted.  Their case is that the 1st Defendant is entitled to his unpaid employment benefits, including his annual performance bonus. 

CLAIMANT'S SUBMISSIONS

16.  The Claimant raised two issues in its Final Address, namely:

1.       Whether the Claimant has established its claim and thus entitled to the reliefs prayed by the present suit?

2.     Whether the Counter Claimants are entitled to the reliefs prayed by the Counter Claim?

17.  One issue one; the Claimant submits that the burden rests on the party asserting facts to prove them, and that it has discharged that burden by credible pleadings, documentary evidence, and oral testimony. Reliance is placed on sections 131(1), 131(2), and 132 of the Evidence Act 2011, as well as Akande v. Adisa (2012) 15 NWLR (Pt. 1324) 538 at 558 paras. A-G.  The Claimant argues that the employment relationship between itself and the 1st Defendant is undisputed and was governed by Exhibits C1, C2, and C3, being the employment offer, confidentiality undertaking, and non-competition undertaking. These documents, it submits, created binding contractual obligations that both parties were bound to honour. On the binding nature of contract terms, the Claimant relies on Fedpoly, Idah v. Egbeke (2023) 1 NWLR (Pt. 1865) 227 at 256 paras. F-G.  It is further submitted that the 1st Defendant voluntarily executed the non-compete undertaking and that the Defendants admitted the execution of the agreement. Accordingly, the Claimant argues that admitted facts require no further proof, citing Eweje v. O. M. Oil Ind. Ltd (2021) 4 NWLR (Pt. 1765) 117 at 142 para. E. The Claimant also contends that parties are bound by their pleadings and cannot depart from them, relying on BAC Electrical Co. Ltd v. Adesina (2020) 14 NWLR (Pt. 1745) 548 at 566 paras. B-C.  The Claimant maintains that the non-compete undertaking was clearly intended to operate as a post-employment obligation, not merely during the subsistence of employment. Its argument is that the contract of employment did not permit the 1st Defendant to take another job while still in the Claimant's service, and therefore the covenant could not sensibly have been meant to expire during the currency of the employment. The Claimant points out that this position was reinforced in cross-examination when the 1st Defendant admitted that he was not permitted to take another job while employed by the Claimant.

18.  The Claimant further argues that the 2nd Defendant carries on the same business as the Claimant and operates in the same territory, namely Lagos, Nigeria. It says this fact was supported by Exhibit C4, the 2nd Defendant's profile, and was not specifically denied in the pleadings. On the effect of failure to specifically deny pleaded facts, the Claimant relies on Balogun v. E.O.C.B. (Nig.) Ltd (2007) 5 NWLR (Pt. 1028) 584 at 600 paras. E-F.  According to the Claimant, the 1st Defendant breached the non-compete undertaking by taking employment with the 2nd Defendant, while the 2nd Defendant became liable because, after being notified of the restrictive covenant and the ongoing breach through Exhibits C5 and C6, it refused to disengage the 1st Defendant and continued to benefit from his services. On the liability of a third party who, after notice, continues to employ a person in breach of a restrictive covenant, the Claimant relies heavily on Nissan (Nig.) Ltd v. Yoganathan (2010) 4 NWLR (Pt. 1183) 135 at 153 paras. B-H and 158 paras. B-C.  The Claimant submits that the covenant is reasonable and enforceable because it protects its trade skills, confidential information, client exposure, and investment in human capital development. It emphasizes that the 1st Defendant worked for over three years, acquired expertise while in the Claimant's employment, and that DW2 admitted under cross-examination that the 2nd Defendant employed the 1st Defendant because of his expertise in pest control. The Claimant characterizes this evidence as an admission against interest and relies on Offodile v. Offodile (2019) 16 NWLR (Pt. 1698) 189 at 211 para. F.  The Claimant also attacks the Defendants' evidence as contradictory. It argues that the Defendants simultaneously contended that the covenant expired during the 1st Defendant's employment and, at the same time, that it was unreasonable and oppressive. The Claimant says these are inconsistent positions amounting to approbation and reprobation. On this point, it relies on Intercontinental Bank Ltd v. Brifina Ltd (2012) 13 NWLR (Pt. 1316) 1 at 22 para. H. It further submits that the contradiction was repeated in the witness deposition and oral evidence, thereby undermining the credibility of the defence, citing Emeka v. Okoroafor (2017) 11 NWLR (Pt. 1577) 410 at 514 paras. B-D. 

19.  The Claimant rejects the Defendants' reliance on the FCCPA 2019. It argues that the contract documents, including the non-compete undertaking, were executed in 2018 before the enactment of the FCCPA on 30 January 2019. The Claimant submits that the statute cannot retrospectively impair existing contractual obligations. On the presumption against retrospectivity, it relies on Agbeti v. State (2024) 14 NWLR (Pt. 1955) 345 at 368 paras. B-C; Alewa v. S.S.I.E.C. (2007) 15 NWLR (Pt. 1057) 285 at 304 paras. B-G; and Adesanoye v. Adewole (2000) 9 NWLR (Pt. 671) 127 at 165 H and 170 H - 171 B.  The Claimant also answers the Defendants' argument that the geographical scope of the covenant is too wide. Its position is that the present action seeks enforcement only in Nigeria, where the contract was made and where both parties operate, so the objection on international breadth is speculative. On the impropriety of speculation, the Claimant cites Zabusky v. Israeli Aircraft Ind. (2008) 2 NWLR (Pt. 1070) 109 at 133 paras. F-G.  On the question of whether a three-year restraint is unreasonable, the Claimant argues that such duration is not per se invalid and refers to Overland Airways Ltd v. Captain Raymond Jim (unreported, Suit No. NICN/LA/597/2012), where a four-year restrictive covenant was enforced.  Finally, the Claimant submits that once breach of contract is established, damages naturally follow. For this proposition it relies on First Inland Bank v. Jerks (Nig.) Ltd (2014) 16 NWLR (Pt. 1434) 567 at 582 para. H.

20.  Issue two – the counterclaim; the Claimant submits that a counterclaim is a separate and independent action, and the Counter-Claimants bear the burden of proving it on the balance of probabilities. The Claimant relies on Susainah (Trawling Vessel) v. Abogun (2007) 1 NWLR (Pt. 1016) 456 at 488 paras. B-E, section 131(1) and 132 of the Evidence Act 2011, and Access Bank Plc v. Ogboja Plc (2022) 1 NWLR (Pt. 1812) 547 at 581 paras. B-C.  The Claimant argues that the Counter-Claimants failed to prove their core assertion that the non-compete obligation ran only during the 1st Counter-Claimant's employment.  He points out that the Claimant expressly pleaded that the 1st Defendant could not have exhausted the restraint period while still employed because he had no liberty to take another job during that time, and this was confirmed by DW1 under cross-examination. The Claimant emphasizes that this pleading was not specifically denied, and therefore is deemed admitted, relying on P.I.P.C.S. Ltd v. Vlachos (2008) 4 NWLR (Pt. 1076) 19 paras. B-C.  The Claimant also submits that DW1 and DW2 gave contradictory evidence on whether the restraint could expire during employment. It argues that such contradiction renders the Counter-Claimants' case unreliable and cites Osadim v. Taiwo (2010) 6 NWLR (Pt. 1189) 155 at 180 para. C.  As to the Counter-Claimants' alternative prayer that the non-compete clause is unreasonable, oppressive, contrary to public policy, and yet also expired upon termination, the Claimant contends that the relief is self-defeating and internally contradictory. It argues that the Court should not grant a strange or inconsistent relief and again relies on Nissan (Nig.) Ltd v. Yoganathan at 156 paras. G-H. The Claimant says the Counter-Claimants are merely advancing inconsistent positions to evade liability, likening this to a sham defence. For that proposition, it cites Okoli v. Morecab Finance (Nig.) Ltd (2007) 14 NWLR (Pt. 1053) 37 at 69 paras. A-C.  The Claimant further submits that the Counter-Claimants' declaratory reliefs must fail because declaratory reliefs are not granted as a matter of course and must be supported by credible and sufficient evidence. On that standard, the Claimant relies on Ofongo v. APC (2022) 4 NWLR (Pt. 1821) 543 at 573 paras. G-H.

21.  Regarding the 2nd Counter-Claimant's prayer that there is no cause of action against it, the Claimant argues that this misconceives its case. Its complaint against the 2nd Defendant is not that it was a party to the original contract, but that, after being notified of the 1st Defendant's post-employment obligations, it retained him and induced the continuing breach. The Claimant says its pleadings disclose all the material facts necessary for a cause of action and relies on Egbe v. Adefarasin (1985) 1 NWLR (Pt. 3) 549, where cause of action was defined as the factual situation which, if proved, entitles the plaintiff to a remedy.  On the 1st Counter-Claimant's claim for N1,000,000 annual performance bonus, the Claimant submits that no contractual basis was pleaded or proved. It argues that rights and entitlements in a master-servant relationship depend on the agreed terms of employment, citing Umera v. NRC (2022) 10 NWLR (Pt. 1838) 349 at 395 paras. D-E and Adebayo v. O.A.U.T.H.C.M.B. (2000) 9 NWLR (Pt. 673) 585 at 607 para. B.  The Claimant also argues that the Counter-Claimants failed to file a reply to the Defence to Counter-Claim where the Claimant had pleaded that the resignation was abrupt, that the bonus and medical insurance claim was an afterthought, and that the monetary reliefs were baseless. Since a counterclaim is an independent action governed by the usual rules of pleadings, the failure to reply amounts to an admission. On this, the Claimant relies on Effiom v. Ironbar (2000) 11 NWLR (Pt. 678) 344 at 357 para. C, Order 33 Rule 2 of the NICN Rules 2017, and Ansa v. Ntuk (2009) 9 NWLR (Pt. 1147) 557 at 590 para. D.  Lastly, on the claim for N5,000,000 general damages, the Claimant submits that the Counter-Claimants did not prove any wrongful act by the Claimant or any loss flowing from such act. It cites Osuji v. Isiocha (1989) 3 NWLR (Pt. 111) 623 at 636 para. C on the nature of general damages, and argues that even general damages require a proven wrongful act as foundation.

DEFENDANTS’ REPLY ON POINTS OF LAW

22.  On whether the Claimant has established its claim and is entitled to the reliefs sought; the Defendants reply that the Claimant was wrong to argue that the 1st Defendant's testimony under cross-examination should be discountenanced merely because it was not specifically pleaded. Their position is that, although the general rule is that evidence not supported by pleadings goes to no issue, there is a settled exception where the evidence is elicited under cross-examination on facts already in issue between the parties. Such evidence, they submit, is admissible and can properly be relied upon by the Court.  In support, the Defendants rely on Olua v. Emetu & Ors (2019) LPELR-46841(CA), where the Court of Appeal held that facts relevant to facts in issue may be elicited during cross-examination and acted upon. The authority itself referred to Bida v. Abubakar (2011) 5 NWLR (Pt. 1239) 130 and Isheno v. Julius Berger (Nig.) Plc (2009) 6 NWLR (Pt. 1084) 582. On that basis, the Defendants submit that the 1st Defendant's cross-examination evidence concerning his prior background and skills is admissible and should not be ignored. The Defendants further reply that the Claimant's assertions that the 1st Defendant acquired special expertise, skills, and know-how from the Claimant are speculative and unsupported by evidence. They argue that courts decide cases on evidence, not conjecture. For this proposition, they cite Zabusky v. Israeli Aircraft Ind. (2008) 2 NWLR (Pt. 1070) 109 at 133 paras. F-G for the principle that courts are not given to speculation.  They also submit that where there is any conflict in oral testimony, documentary evidence is the safest guide to the truth. On that point, they rely on BFI Group Corp v. B.P.E. (2012) 18 NWLR (Pt. 1332) 209 at 236 para. E, where the Supreme Court emphasized that documentary evidence serves as the hanger on which the truth may be unearthed. The Defendants therefore contend that the Claimant's failure to tender documentary proof of the alleged skills transfer, trade secrets, or specialized training - particularly in light of the payback agreement wording in Exhibit C3 - leaves the Claimant's assertions speculative and unproved.

23.  In answer to the Claimant's complaint that the Defendants advanced a contradictory defence, the Defendants submit that no true contradiction has been shown. They argue that what the Claimant calls contradictions are, at most, minor discrepancies or complementary legal positions, not mutually destructive evidence. On the legal meaning of contradiction, they rely on Wachukwu & Anor v. Owunwanne & Anor (2011) LPELR-3466(SC), where the Supreme Court explained that contradiction arises only where one piece of evidence affirms the direct opposite of another, not where there is merely a minor difference in detail.  On the applicability of the Federal Competition and Consumer Protection Act 2019, the Defendants oppose the Claimant's argument that the Act cannot affect Exhibit C3 because the contract was executed before the Act came into force. Their answer is that the relevant law is the law in force when the cause of action arose, not necessarily the law existing at the date the agreement was made. They rely on Total Nig. Plc v. New Cargo Handling Co. (2015) 17 NWLR (Pt. 1489) 558 at 591-592, where the Court held that the applicable law is the law in force at the time the cause of action arose.  Applying that principle, the Defendants argue that the cause of action in this case arose only in 2022, when the Claimant allegedly discovered the breach and wrote its solicitor's letter dated 28 November 2022, not in 2018 when the non-compete agreement was signed. Accordingly, they contend that the FCCPA 2019 applies to the present dispute and renders Exhibit C3 unenforceable to the extent that it offends section 68(e). 

24.  On whether the Counter-Claimants are entitled to the reliefs sought in the counterclaim; the Defendants reply specifically to the Claimant's argument that failure by the Counter-Claimants to file a further reply to the Claimant's defence to counterclaim amounts to an admission of the facts raised therein. The Defendants submit that this is a wrong statement of law.  Their argument is that a reply is not required where the original pleading has already joined issues on the relevant facts. In other words, where the statement of claim or counterclaim has already asserted facts contrary to those later repeated in the defence, no further reply is necessary because the issues are already joined.  For that proposition, the Defendants rely on Iwuoha & Anor v. NIPOST Ltd & Anor (2003) LPELR-1569(SC), where the Supreme Court held that a reply to a statement of defence is only necessary where the facts raised have not already been addressed by the earlier pleading, and that duplicative pleadings are unnecessary once issues have been joined.  The Defendants therefore maintain that they and the Claimant had already joined issues in respect of the counterclaim, and that their failure to file a further reply cannot be treated as an admission of the Claimant's averments in defence to counterclaim. 

COURT’S DECISION

25.  The Claimant's case is that the 1st Defendant was employed in a sensitive technical/operations role and, as part of his employment, executed confidentiality and non-competition undertakings on 28 November 2018. The Claimant contends that the 1st Defendant was thereby restrained, for three years and within the territories where the Claimant or its affiliates operate, from working in a similar field or transferring its know-how, client information, technical knowledge, systems or methods.  The Claimant alleges that after resigning, the 1st Defendant took up employment with the 2nd Defendant, which it says is its direct competitor operating in the same territory. It further contends that the 2nd Defendant, after receiving notice by Exhibits C5 and C6, continued to retain the 1st Defendant in employment and thereby induced or promoted the breach.

 

26.  The Defendants' case is that the restraint clause either expired during the course of the 1st Defendant's employment, or, in the alternative, is unreasonable, oppressive, contrary to public policy, and unenforceable. They contend that the Claimant did not give any special training or confer any proprietary knowledge warranting protection, that the 1st Defendant did not have access to trade secrets in the sense alleged, and that the 2nd Defendant was not party to the employment contract and only became aware of the alleged restraint upon receipt of the Claimant's letter in November 2022.  By counterclaim, the Defendants also allege that the 1st Defendant was entitled to annual performance bonus and medical insurance benefits that were not paid.

 

27.  Having considered the pleadings, evidence, exhibits, and submissions of learned counsel, I find that the issues that call for determination are:

 

1.       Whether the Non-Competition Undertaking dated 28 November 2018 is valid and enforceable against the 1st Defendant.

2.     If issue one is answered in the affirmative, whether the Claimant has proved that the 1st Defendant breached the undertaking and that the 2nd Defendant induced or promoted that breach.

3.      Whether the Claimant is entitled to the declaratory and monetary reliefs sought.

4.     Whether the Defendants/Counterclaimants have proved their counterclaim.

 

Issue One - Whether the Non-Competition Undertaking dated 28 November 2018 is valid and enforceable.

 

28.  The law is settled that covenants in restraint of trade are prima facie unenforceable unless shown to be reasonable with reference to the interests of the parties and the public. See Andreas I. Koumolis v. Leventis Motors Ltd (1973) 11 SC 100. The reasonableness of such a covenant depends on its duration, geographical scope, subject matter, and the proprietary interest sought to be protected. See also Infinity Tyres Ltd v. Sanjay Kumar & Ors NICN/LA/170/2014 and 7th Heaven Bistro v. Amit Desphande NICN/LA/396/2018.  The starting point must be the text of Exhibit C3. The clause provides as follows:

 

Due to the significance and materiality of the consideration provided by the company and in consideration of the benefits I received, the sufficiency of which is hereby acknowledged, I agreed that within all local and international territories where Boecker or any of its affiliated or sister or parent companies and for a period of three (3) years, I shall not directly or indirectly own, manage, operate, use, work in similar filed and/or transfer information or know how of any kind including without limitation technical and managerial know how any training accreditation, any client information, any system or method of work or administration related to the company or its fields of activity.

 

29.  Two questions immediately arise:

 

·         whether the restraint is to run during employment or after cessation; and

·         whether, in either event, it is reasonable and enforceable.

 

On the first question, I agree with the Claimant that the more sensible construction of the clause is that it was intended to operate post-employment. A construction that it was to expire during the subsistence of employment would render the clause commercially pointless, since the 1st Defendant could not in the ordinary course lawfully take up employment with a competitor while still in the Claimant's service. DW1 himself acknowledged under cross-examination that he was not permitted to take another employment while in the employment of the Claimant. I therefore reject the Defendants' contention that the covenant was exhausted merely by the passage of three years during active service.  That, however, does not conclude the matter.  The Defendants argued that section 68(e) of the Federal Competition and Consumer Protection Act 2019 limits such restrictions to two years. The Claimant countered that the agreement pre-dated the Act and that the Act cannot retrospectively invalidate vested contractual rights.

 

30.  The Federal Competition and Consumer Protection Act (FCCPA) 2019 is very instructive on this issue.  It makes provisions governing restrictive covenants in Nigeria and that; amongst other objectives that it has which relate to competition and consumer protection, and unfair business practices.  Section 1 of the Federal Competition and Consumer Protection Act 2019 provides as follows:

                  

The objectives of the Act are:

                   Promote and maintain competitive markets in Nigeria;

(a) Promote economic efficiency;

(b)            Protect and promote the interest and welfare of consumers by providing consumers with wider variety of quality products at competitive prices;

(d)            prohibit restrictive and unfair business practices which prevent, restrict or distort competition or constitute an abuse of a dominant position of market power in Nigeria

(e)  Contribute to the sustainable development of the Nigerian economy.

 

31.  In line with the general principle of law earlier stated, the FCCPA 2019 disallows restraint of trade and competition by Companies but it has also advanced same by providing a significant exception to the position of the law. Specifically on the issue of restraint of trade, section 68(e) of the Federal Competition and Consumer Protection Act 2019 provides as follows:

 

                   Nothing in this Act prohibits:

A contract of service in so far as it contains provisions by which a person agrees to accept restrictions as to work whether as an employee or otherwise in which that person may engage during or after the termination of the contract and this period shall not be more than two (2) years.

 

32.  I am not persuaded that the FCCPA point is decisive here. In my respectful opinion, even apart from section 68(e), the Court must still test the covenant against the long-settled common law and labour-law principles governing restraint of trade. Whether or not the FCCPA applies directly, the covenant must still be shown to be reasonable.  The principle in C.F.A.O. v. George Lilbro (1918) 3 NLR 67 remains instructive: an employer seeking to enforce a restraint must show that the employee had access to trade secrets and placed himself in a position to disclose them to a rival. Mere pleading is not enough. See also Newbreed Organisation Ltd v. Erhomosele (2006) 5 NWLR (Pt. 974) 499.  The covenant here is also extremely wide. It extends not merely to Lagos or Nigeria, but to all local and international territories where the Claimant or its related companies operate. It also restrains the 1st Defendant from working in a "similar field" without sufficiently narrowing the economic activity covered.  This geographic and temporal scope is vastly overbroad, punitive, and industry-stifling. A three-year blanket restriction on a worker's right to seek alternative livelihood in their field of expertise is oppressive and contrary to public policy.

 

33.  The Claimant has urged the Court to enforce the restraint only within Nigeria.  While the Court cannot rewrite the parties’ covenant; the Court can excise from a contract, any part that is excessive, and enforce that which is reasonable.  The Claimant has tendered in evidence, as Exhibit C4, the profile of the 2nd Defendant showing that the 2nd Defendant carries on the same business as the Claimant, in Lagos, Nigeria. This places the 2nd Defendant in the category of employers not to engage the 1st Defendant after leaving the employment of the Claimant; locally. 

 

34.  The Claimant led evidence that:

 

·        The 1st Defendant   during his employment with the Claimant was exposed to business and trade data with a view to engender efficiency and optimal performance by the 1st Defendant in the operations and business of the Claimant as the Technical Engineering Officer/Operation Officer of the Claimant.

·        The 1st Defendant’s act of taking employment with the 2nd Defendant its arch – rival in the same location is greatly prejudicial to its business as the 1st Defendant has been exposed to all the trade and operational secrets of the Claimant in the course of his employment with the Claimant.

 

35.  In the La Casera Company Plc v Mr. Prahlad Kottappurath Ganghadaran (unreported Appeal No. CA/L/1059/2016, judgment delivered on the 9th of July 2025) the Nigerian Court of Appeal addressed the doctrine of restraint of trade, non-compete clauses, and executive employment. The landmark case focused on a 5-year restrictive covenant and a high-profile corporate resignation.  The La Casera Company Plc (Appellant/Employer) and Mr. Prahlad Kottappurath Ganghadaran (Respondent/Former Chief Operating Officer).  Mr. Prahlad resigned from his role as COO on November 27, 2012 and soon joined a direct industry competitor as a New Business Development Manager.  The Court of Appeal invalidated the indefinite restraint, holding that a perpetual restriction on employment was inherently unreasonable and contrary to public policy. The Court upheld the five- year restraint, finding it reasonable in the circumstances, given the Respondent’s sensitive position, access to confidential information, and the competitive nature of the beverages industry.   As Chief Operating Officer, the Respondent exercised oversight across the organisation and had access to sensitive strategic and operational information capable of causing significant competitive harm post-employment. 

36.  The position of the Court of Appeal in disallowing the restraint in the LaCasera case with respect to the clause relating to restraint in perpetuity, is comparable to the restraint in this case applying “within all local and international territories where Boecker or any of its affiliated or sister or parent companies and for a period of three (3) years”.  The scope is indeed too wide to be enforced.  It is instructive that in the said case of LaCasera, the Court justified the five-year ban based on the proof of the position of the Respondent in the company.  I have considered the evidence led in this case, and find that the Claimant is in the same business with the 2nd Defendant, and within the same locality of Lagos, Nigeria.  The Claimant gave evidence of the 1st Defendant having customer connection; as follows:

The 1st Defendant acquired enormous expertise and while in the employment of the Claimant he operated as a Technical Engineering Officer/Operation Officer, a position that afforded him an opportunity of growth and contact with the clients of the Claimant, thereby exposing the 1st Defendant to sensitive trade secrets, expertise and experience on the credit of the Claimant.

37.  Further, in the clause in question, the 1st Defendant affirmed to having received adequate consideration in exchange for the restraint.  The clause started as follows; “Due to the significance and materiality of the consideration provided by the Company and in consideration of the benefits I received, the sufficiency of which is hereby acknowledged

An employee of the 1st Defendant’s status cannot feign ignorance of the import of the above clause; and would not be allowed to deny receiving any consideration in exchange for the restraint, as he now argues.  The position the 1st Defendant occupied as Technical Engineering Officer/Operation Officer, was such as can harm the business of the Claimant if taken freely to a competing company as the 2nd Defendant.  I am convinced in the reasonableness of the restraint, only with respect to Lagos; the locality where both the Claimant and the 2nd Defendant, operate.  I find it unreasonable to restrain the 1st Defendant “within all local and international territories where Boecker or any of its affiliated or sister or parent companies”.    

38.  With respect to the three years restraint, I adopt the two years permissible restraint provided in section 68(1)(e) of the Federal Competition and Consumer Protection Act (FCCPA) 2019, which provides a statutory and thereby more context into the use of clauses governing post-contract work restrictions in contracts of service or contracts for the provision of services.  The cause of action in this suit accrued in 2022, after the coming into force of the FCCPA.  Apart from the provision of the FCCPA, I find a two-year restraint reasonable in the circumstances of this case.

Issue Two - Whether the 1st Defendant breached the undertaking and whether the 2nd Defendant induced that breach.  From the finding under issue one, the 1st Defendant breached the undertaking, to the extent found by the Court to be reasonable; that is, as it relates to Lagos and for a period of two years.  On the issue of the 2nd Defendant inducing the Claimant to breach his contract, the Claimant did not prove that the 2nd Defendant actively enticed the 1st Defendant away; the evidence shows the 1st Defendant applied for employment independently.  The 2nd Defendant separately states that it was completely unaware of the non-compete agreement until it received the letter dated 28th November 2022; followed by Exhibit C5 dated 9th December 2022.  It asserts it was an embarrassed innocent third party, and that the Claimant has no valid cause of action against it since it was never a party to the employment contract.  I do not accept that there was no cause of action against the 2nd Defendant after the letters of 28th November and 9th December; however, I still do not find any evidence showing that the 2nd Defendant actively induced the 1st Defendant to join it.

 

39.  Issue three - Whether the Claimant is entitled to the declaratory and monetary reliefs sought.  Having resolved Issue One in favour of the Claimant only in part, namely that the Non-Competition Undertaking is enforceable only to the extent that it restrains the 1st Defendant within Lagos and for a period of two years, and having further found under Issue Two that the 1st Defendant breached that enforceable restraint, I now turn to the reliefs sought by the Claimant.  The Claimant seeks two declaratory reliefs and monetary reliefs in damages.  A declaratory relief is not granted as a matter of course. A party seeking it must succeed on the strength of its own case and place sufficient credible evidence before the Court. In the present case, the Claimant tendered Exhibits C1, C2 and C3 showing the employment relationship, the confidentiality undertaking and the non-competition undertaking. I have already held that the restraint in Exhibit C3 is not wholly void, but is enforceable only within reasonable bounds; that is, within Lagos and for two years post-employment. I have also found that the 1st Defendant, by taking employment with the 2nd Defendant in Lagos within that enforceable restraint period, acted in breach of the undertaking to that limited extent.  Accordingly, relief (a) succeeds only in part. It is hereby declared that the 1st Defendant is in breach of the Non-Competition Undertaking dated 28th November 2018, to the extent that the undertaking validly restrained him from taking up similar employment within Lagos for two years after the cessation of his employment with the Claimant.

 

40.  On relief (b), the Claimant asks for a declaration that the 2nd Defendant induced and promoted the breach by retaining the 1st Defendant in its employment. The evidence does not show that the 2nd Defendant actively solicited or lured the 1st Defendant away from the Claimant before his resignation. In that sense, the allegation of initial inducement is not made out. However, the 2nd Defendant admittedly became aware of the subsisting restraint once it received the Claimant's letters and still retained the 1st Defendant in its employment. In that limited sense, the 2nd Defendant cannot escape responsibility entirely. Still, the wording of relief (b) is broad and seeks a full declaration of inducement and promotion of breach. On the evidence before me, I am not satisfied that the Claimant proved inducement in the primary sense required for the full declaratory relief sought. Relief (b) therefore fails.

41.  I now consider the monetary claims. The Claimant claims N20,000,000.00 as special damages, or alternatively N20,000,000.00 as general damages.  Special damages must be specifically pleaded and strictly proved. The Claimant was under a duty to show actual loss flowing from the breach, such as diversion of customers, loss of business, misuse of confidential information, identifiable pecuniary loss, or some computation linking the Defendants' conduct to the amount claimed. That was not done. No concrete evidence was led to justify the sum of N20,000,000.00 as special damages. The claim for special damages therefore fails.  The alternative claim for general damages stands on a different footing. Once a breach of contractual obligation is established, the Court may award general damages as compensation for the legal injury flowing naturally from the breach. The Claimant has established that the 1st Defendant breached the enforceable part of the non-compete clause. The Court has also found that the 2nd Defendant, after notice, continued the employment relationship in circumstances inconsistent with the Claimant's contractual protection within Lagos. Although the Claimant did not prove special damage in the strict sense, it is plain that some injury flowed from the violation of the enforceable covenant.

42.  That said, the Court must be careful not to reward overreach. The covenant as drafted was excessively wide, and the Claimant has only succeeded in part. The damages to be awarded must therefore reflect the limited success of the Claimant and the restricted extent to which the covenant has been upheld. The Claimant sought for N20,000,000 as general damages.  In my view, an award of N5,000,000.00 as general damages is fair and reasonable in the circumstances.  On the claim for costs, costs ordinarily follow the event. Since the Claimant has succeeded only in part, and the Defendants have equally resisted the broader reliefs sought, I assess costs at N2,000,000.00 in favour of the Claimant. 

43.  Issue Four - Whether the Counterclaim has been proved.  A counterclaim is a separate and independent action and must stand or fall on its own evidence. See Susainah (Trawling Vessel) v. Abogun (2007) 1 NWLR (Pt. 1016) 456 and Access Bank Plc v. Ogboja (2022) 1 NWLR (Pt. 1812) 547.    The Counterclaimants seek declarations that the non-compete clause covered only the period of employment, or alternatively that it expired on 28 November 2021, or alternatively that it is unreasonable and unenforceable.  I have already held that the argument that the covenant operated only during the subsistence of employment is not persuasive. I also reject the contention that it simply expired by passage of three years during employment. Those declaratory reliefs therefore fail.  On the prayer that the 2nd Counterclaimant is not a party to the contract, that much is true as a matter of privity; however, the Claimant's case against the 2nd Defendant was not based on privity but on alleged inducement of breach. The proper question is not whether the 2nd Defendant signed the contract, but whether the Claimant disclosed a cause of action against it. The pleadings did disclose one, as held under issue three.  I therefore decline to grant the declaration that there was no cause of action against the 2nd Defendant.  On the claim for N1,000,000.00 unpaid performance bonus, the Counterclaimants did not place before the Court sufficient contractual basis, computation, or documentary proof showing that the 1st Counterclaimant became entitled to that exact sum and that it remained unpaid. That claim fails.  The claim for N5,000,000.00 general damages equally fails as no actionable wrong by the Claimant has been sufficiently established to warrant that award.  The counter claim fails in its entirety.  

 

Judgment is entered accordingly. 

 

 

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Hon. Justice (Prof) Elizabeth A. Oji