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/14/2023

BETWEEN

BOECKER PUBLIC HEALTH SERVIVES LIMITED  CLAIMANT

AND

1.      CHARBEL YAGHMOUR                    

2.     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 10th day of November 2020 executed in favour of the Claimant by the 1st Defendant pursuant to the 1st Defendant’s contract of employment dated the 10th day of November 2020.

 

b.      A DECLARATION that the 2nd Defendant induced and promoted the breach of 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 N30,000,000.00 (Thirty Million Naira) as special damages to the Claimant pursuant to the breach of post-employment contractual obligations by the 1st Defendant.

 

ALTERNATIVELY,

 

General damages in the sum of N30,000,000.00 (Thirty 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:

(i)               A DECLARATION that the Non compete Clause in the Contract of Service agreement signed by the 1st Counter Claimant on 10th November 2020 in favour of the Claimant is unreasonable, oppressive and contrary to public policy and same cannot be enforced against the 1st Counter Claimant.

 

(ii)            A DECLARATION that the 2nd Counter Claimant having not being a party, to the contract of service Agreement cum the Non Compete Agreement of 10 November 2020 between the 1st Counter Claimant and the Claimant, establishes that the Claimant has no cause of action against the 2nd Counter Claimant.

 

(iii)         AN ORDER that the Claimant pay to the 1st Counter Claimant the sum of N2,735,000 (Two Million Seven Hundred and Thirty Five Thousand Naira) covering:

 

i.        One Month in lieu of Notice for wrongful termination of employment at the rate of N235,000 (Two Hundred and thirty Five Thousand Naira)

 

ii.       7 Month Salary from December 2021 to July 2022 when the 1st Counter Claimant got another job in 2nd Counter Claimant Company being the sum of N10,000,000 (Ten Million Naira).

 

(iv)          Damages in the sum of N5,000,000 (Five Million Naira) for wrongful termination.”

 

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 13th June 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 thirteen documents marked Exhibits C1 to C13 as follows:

 

i.        Exhibits C1            Contract of Service dated the 10/11/2020.

ii.       Exhibits C2            Profile of the 2nd Defendant.

iii.      Exhibits C3            Tenancy Agreement in respect of

Accommodation secured by the Claimant for the 1st Defendant.

iv.      Exhibits C4            Evidence of insurance for the 1st Defendant and

Family.

v.       Exhibits C5            Business Proposal to Eko Hotels and Suites by the

2nd Defendant.

vi.      Exhibits C6           Letter of the Claimant’s Solicitors dated the 28th day

of  November 2022.

vii.     Exhibits C7            Letter of the Claimant’s Solicitors dated the 9th day

of December 2022.

viii.    Exhibits C8            Documents showing payment of severance package.

ix.      Exhibits C9           Group health Care Insurance Endorsement of

Insurance for Lebanese in Africa effective till 30th day of November 2021.

x.       Exhibits C10           Evacuation Insurance Endorsement of Insurance for

Lebanese in Africa effective till 30th day of November 2021.

xi.      Exhibits C11           Trail of mail dated the 15th day of November 2021

on extension of insurance cover for the MR. CHARBEL YAGHMOUR and his family.

xii.     Exhibits C12           Finalization payment Charbel Yaghmour dated the

10th day of November 2021

xiii.    Exhibits C13           United Bank for Africa (UBA) Plc. Online Transfer

Advice dated the 15th day of November 2021.

 

4.  The Defendants called Charbel Yaghmour (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 2 documents which were admitted and marked as Exhibits D1 to D2:

a.       Offer letter dated 10th November 2020                         Exhibit D1

b.       Termination of employment letter dated 25th July 2022        Exhibit D2

 

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 the 5th of January 2021 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 Sales Consultant of the Claimant vide an employment offer dated the 10th day of November, 2020 and had access to vital business secrets of the Claimant due to the sensitivity of the position the 1st Defendant occupied in the employment of the Claimant. The Claimant provided accommodation to the 1st Defendant and the 1st Defendant and his immediate family enjoyed the Group Health Care Insurance provided by the Claimant.   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’ case is that the 1st Defendant was employed on 6th December, 2018 by the Claimant and the purported non-competition undertaking in his contract of service was meant to last for three years of his employment and not after his employment thereof.  The 1st Defendant continued to work in the Claimant’s Company until the 1st November, 2021 when his employment was terminated without any justification.  The 1st Defendant’s appointment with the Claimant was terminated on the said 1st November 2021 without any query and fair hearing. The 1st Defendant was not given an opportunity to defend himself against the allegation made against him.  The Defendants state that the Non-competition Agreement between him and the Claimant being a restraint of trade 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 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 Claimant’s 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 10th November 2021 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 state that the 1st Defendant was not served with a query or given an opportunity to defend himself before the Claimant terminated his employment for alleged misconduct.  That at the time of the employment of the 1st Defendant was terminated, he was not paid any compensation or severance package.  He was not given one month notice or any money in lieu of one month notice of termination of employment by the Claimant.  The Defendants state tat the termination of the 1st Defendant from the Claimant was wrongful and contrary to fair hearing as he was not informed of any alleged misconduct or given an opportunity to defend himself before the termination of his employment by the Claimant.  Before the sacking of the 1st Defendant, he was earning the sum of N235, 000 (Two Hundred and Thirty Five Thousand Naira) and $2,500 (Two Thousand Five Hundred Dollars) respectively monthly and was also entitled to annual performance bonus and medical insurance which is given annually. 

 

CLAIMANT’S REPLY TO THE STATEMENT OF DEFENCE

8.  In reply, the Claimant states that the 1st Defendant has been in the employment of the Claimant until   the 1st day of November 2021 when his employment was terminated by the mutual agreement of the parties due to the admitted poor performance of the 1st Defendant.  The Claimant states that the 1st Defendant was paid his severance package at the time of termination of his employment, thus, there is no pending obligation to the 1st Defendant from the Claimant. The Claimant states further that in demonstration of Fair Labour Practice, it allowed the 1st Defendant to retain his official apartment and continued to enjoy Medical Insurance for a while on the credit of the Claimant, pending when the 1st Defendant secured another employment the Claimant ensured the insurance of the 1st Defendant ran till the 31st day of November 2021.  That the 1st Defendant acquired enormous expertise and while in the employment of the Claimant he operated as a Sale Consultant, 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, which are now deployed to the exclusive benefit of the 2nd Defendant contrary to Non-compete Undertaking executed by the parties. The Claimant states in reply to the Counterclaim that the 1st Defendant had displayed gross incompetence while in the employment of the Claimant pursuant to which the 1st Defendant was issued several warnings.  The 1st Defendant has now moved to the employment of the 2nd Defendant and has deployed the contacts and clients of the Claimant to the benefit of the 2nd Defendant and to the detriment of the Claimant. The employment of the 1st Defendant was not unfairly terminated as the termination was pursuant to the refusal to return to work after the expiry of leave contrary to the contract of employment between the parties.  The Claimant further states that the 1st Defendant was queried for poor performance to which the Claimant has always expressed concerns.  The Claimant states that 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 Sale Consultant 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. 

 

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 10th November 2020 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. 

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 N30, 000, 000. 00 (Thirty Million Naira), or in the alternative, general damages in the sum of N30, 000, 000. 00 (Thirty Million Naira), 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.  The Defendants submit that the Defendants have proved the counterclaim, in that the 1st Defendant’s employment has established that he was wrongfully terminated when the Claimant summarily dismissed him on the 1st November 2021.  That in the absence of a contractual provision as to length of termination notice, reference is to be made to the Labour Act 2004.  The Defendants referred to Section 9 (7) of the Labour Act 2004 that termination may be by three (3) ways which are: a. by expiry of the employment period.  B. by the death of the employee before the expiry of such period. C. by notice.  The Defendants submit that wrongful termination of employment in Nigeria occurs where the employer terminates the employment of the employee due to misconduct by the employee without giving him fair hearing.  They argue that in the instant case, the 1st Defendant’s employment was terminated by a letter of termination, Exhibit D2, which clearly stated that the 1st Defendant was expunged from the Clamant Company because of the allegations that his job competencies and objectives have not been met, without being given the required notice or adequate payment in lieu of notice or fair hearing.  That it is evident that at no time did the Claimant adduce any evidence that establishes that the 1st Defendant was not competent at his job and did not meet his objectives (i.e. the misconduct) as alleged by its termination letter (Exhibit D2).  Furthermore, the Claimant has not tendered or provided any evidence in this suit that establishes that Claimant’s standards and level of performance that the 1st Defendant was meant to attain.  The Defendants submit that by the Employment Letter (Exhibit D1), the Claimant is duty bound to provide the 1st Defendant with a written performance appraisal once per year and same shall be the basis of the 1st Defendant’s performance review. The Defendants referred to Paragraph VIII of Exhibit D1 which provides that; “You will be provided with a written performance appraisal once per year and said appraisal will be reviewed at which time all aspects of your performance can be fully discussed.”  The Defendants contend that from the records of this Honourable Court, the Claimant has not tendered any written performance appraisal nor was any document tendered evidencing queries or termination by the mutual agreement of the parties due to the alleged poor performance of the 1st Defendant as alleged by the Claimant.  They further submit that the failure by the Claimant to act in line Exhibit D1 has denied the 1st Defendant the opportunity of fair hearing and led to the wrongful termination of his employment.    

 

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, containing the employment offer, confidentiality undertaking, and non-competition undertaking. This, 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. 

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 C2, 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 C6 and C7, 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 about 1(one) year, acquired expertise while in the Claimant's employment, which are now being deployed for the benefit of the 2nd Defendant.  The Claimant referred to exhibit C5 which is a business proposal sent by the 1st Defendant to Eko Hotel and Suites, an existing customer of the Claimant to the knowledge of the 1st Defendant.  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.

 

19.  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 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.

20.  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.  The Claimant argues that the 1st Defendant employment was terminated pursuant to the agreement of the parties and that the 1st Counter Claimant was paid severance package pursuant to the mutually agreed termination of the employment; and submits that in the light of the uncontroverted pleadings and the evidence before the Honourable Court that the 1st Counter Claimant is not entitled to the monetary reliefs prayed as the 1st Counter Claimant has not denied the fact that he has been paid finalization package in the sum of US$5,600.00 (Five Thousand Six Hundred US Dollars) and the sum of N124,299.00 (One Hundred and twenty Four Thousand Two Hundred and Ninety Nine Naira).  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 1st Defendant’s employment was terminated pursuant to the agreement of the parties and that the 1st Counter Claimant was paid severance package pursuant to the mutually agreed termination of the employment.  They submit that in the light of the uncontroverted pleadings and the evidence before the Honourable Court that the 1st Defendant is not entitled to the monetary reliefs prayed as he has not denied the fact that he has been paid finalization package in the sum of US$5,600.00 (Five Thousand Six Hundred US Dollars) and the sum of N124,299.00 (One Hundred and twenty Four Thousand Two Hundred and Ninety Nine Naira). That 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

21.  On whether the Claimant has established its claim and is entitled to the reliefs sought; the Defendants 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.  On the purport of exhibit C5, they argue that upon a careful examination of Exhibit C5, it would be discovered that the said evidence does not establish the allegations made by the Claimant that the 1st Defendant sought to pursue the Claimant’s clients, rather it is a business proposal made by the 2nd Defendant to a company, Eko Hotel and Suites, that is known to the general public (Public Knowledge) and not solely to the Claimant and the 1st Defendant. The Defendants also contend that the Claimant's failure to tender documentary proof of the alleged skills transfer, trade secrets, or specialized training. 

 

22.  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

23.  The Claimant's case is that the 1st Defendant was employed in a sensitive Sale Consultant role and, as part of his employment, executed confidentiality and non-competition undertakings on 10th November 2020. 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 he was terminated due to poor performance and incompetence, 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 C6 and C7, continued to retain the 1st Defendant in employment and thereby induced or promoted the breach.

 

24.  The Defendants' case is that the restraint clause 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 salary in lieu of notice, salaries and damages for wrongful termination.

 

25.  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 10th November 2020 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 10th November 2020 is valid and enforceable.

 

26.  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 C1. 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.  On the reasonability of the above clause, the Defendants argued that section 68(e) of the Federal Competition and Consumer Protection Act 2019 limits such restrictions to two years.  The Defendants submit that it is clear and without doubt that the non-competition undertaking executed between the Claimant and the 1st Defendant in this suit is for a period of 3 years is in a clear breach or default of the provisions of section 68(e) of the FCCPA 2019 and as such the said non-competition undertaking is void, contrary to public policy and cannot be enforced in anyway whatsoever.    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.

 

30.  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.

 

31.  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 unreasonable and contrary to public policy.

 

32.  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 C2, 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. 

 

33.  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 a Technician in 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.

 

34.  In the case of 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. 

35.  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 Sales Consultant, 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.

36.  Further, in the clause in question, the 1st Defendant affirmed to having received adequate consideration in exchange for the restraint.  The clause stated 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

However, an otherwise valid and therefore enforceable restraint will be rendered nugatory where the employer wrongly terminates the employment of an employee or by other extenuating circumstances.   See Stenhouse Australia Ltd v. Philips (1974) A.C 391.  The logic is that the law will not allow a person to benefit from their own wrongdoing.  See PDP v. Ezeonwuka & Anor. [2017] LPELR-4263 (SC) where the apex Court held that “Equity, acting in personam, would not allow a party to benefit from his own iniquity. It insists that whoever comes to it or justice must do justice, and must not come to the temple of justice with dirty hands." Per EJEMBI EKO ,JSC (P. 105, paras. B-C).  This is in line with the general contract principle that an employer cannot simultaneously repudiate a contract and claim the benefit of its protections stated in the landmark House of Lords decision in General Billposting Co Ltd v Atkinson (1909) AC 118. 

37.  Therefore, though there is evidence of the agreement in restraint of trade; and though I found it severable and applicable in the context found in the just delivered decision in Suit No. NICN/LA/12/2023 Boecker Public Health Service Limited v. Bayode Joseph Olusunde & Anor, where the Claimant resigned and joined a competing company, the case is different in the current case.  From evidence, the 1st Defendant’s employment was terminated by a letter of termination, Exhibit D2, which clearly stated that the 1st Defendant was expunged from the Clamant Company because of the allegations that his job competencies and objectives have not been met.  The Claimant did not adduce any evidence that establishes that the 1st Defendant was not competent at his job and did not meet his objectives as alleged by its termination letter (Exhibit D2).  The Claimant failed to comply with paragraph VIII of Exhibit C1 which provides that:

“You will be provided with a written performance appraisal once per year and said appraisal will be reviewed at which time all aspects of your performance can be fully discussed.”

There is no evidence before this Court of any written performance appraisal nor was any document tendered evidencing queries or termination by the mutual agreement of the parties due to the alleged poor performance of the 1st Defendant as deposed to in the Claimant’s Witness additional statement on oath dated the 4th day of April 2023.  Having given the reason for the termination, it was up to the Claimant to establish that reason by evidence, which it failed to do.  Exhibit C1 paragraph VI provides for 1st Defendant’s remuneration.  In Exhibit C11, the Claimant stated that they will pay an additional ½ month salary; without clarifying what it represents.  Exhibit C12 shows the amount paid as salary is less than what is provided in exhibit C1 paragraph VI.   All these establish non-compliance with the contract in the termination of the Claimant; making it wrongful.  Outside the wrongfulness of the termination, I see that the 1st Defendant’s employment with the Claimant lasted from 5th of January 2021 (when he signed exhibit C1) to 1st November 2021 when he was terminated via exhibit D2.  Without evidence of any training and with the Claimant’s assertion of 1st Defendant’s incompetence, I find that it will be unreasonable to restrain the 1st Defendant as sought to be done.   In the circumstance where the Claimant breached the contract between it and the 1st Defendant making the termination wrongful, and in view of the position and length of the employment and the allegations of incompetence, I find it unreasonable to apply the restrain on the 1st Defendant.  That being so, the case of the Claimant fails totally.

With respect to the counter-claim; 

38.  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 unreasonable and unenforceable.  I have already held that the non-compete clause is unenforceable for the Claimant’s breach of the contract, and for being unreasonable.  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 Claimant’s action having failed on the ground of its initial breach, there was no cause of action against the 2nd Defendant.  I therefore declare that there was no cause of action against the 2nd Defendant but not on the ground sought by the Defendants. 

 

39.  Though I found that it will be unreasonable to enforce the restraint on the 1st Defendant, the 1st Defendant still has the burden of establishing the reliefs he seeks.  With respect to the claim for an order that the Claimant pay to the 1st Defendant the sum of N2, 735, 000 (Two Million Seven Hundred and Thirty-Five Thousand Naira) covering:

                               i.            One month in lieu of Notice for wrongful termination of employment at the rate of N235, 000 (Two Hundred and Thirty-Five Thousand Naira)

                             ii.            7 month salary from, December 2021 to July 2022 when the 1st Counter Claimant got another job in 2nd Counter Claimant Company being the sum of N10, 000, 000 (Ten Million Naira)

The 1st Defendant did not lead evidence to show provision of one month notice in the contract of employment.  The employment having lasted for less than one year, and applying section 11 of the Labour Act, the 1st Defendant is not entitled to one month notice or its equivalent in lieu of notice.  This relief therefore fails.    On the claim for “7 month salary from, December 2021 to July 2022 when the 1st Counter Claimant got another job in 2nd Counter Claimant Company being the sum of N10, 000, 000 (Ten Million Naira)”, I find no evidence showing when the 1st Defendant commenced work in the 2nd Defendant.  No exact date was stated in evidence.  In any case, the 1st Defendant has not justified why he should be paid salary after termination; even if wrongful.  The 1st Defendant seeks damages in the sum of ?5,000,000 (Five Million Naira) for wrongful termination.  Having found the termination to be wrongful, I award the sum of N500,000 (Five Hundred Thousand Naira) in favour of the 1st Defendant as damages for wrongful termination.  This amount is justified because the success of the counter claim is minimal.  See IDSL v. Evbuomwan & Ors 2026 LPELR-83713 (SC) @15-16 paras C-G where the Supreme Court Per Emmanuel Akomaye Agim, JSC, the Court reasoned that where an employer terminates employment outside the terms of the contract, the employer cannot thereafter hide under the same contract to restrict damages merely to salary in lieu of notice. Once the breach transcends the contractual procedure, damages cease to be mechanically limited to notice pay alone.  The adjudged sum is to be paid not later than 30 days from this date of judgment; failure interest shall accrue at the rate of 20% per annum.

 

Judgment is entered accordingly.  Parties shall bear their respective costs.

 

 

 

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Hon. Justice (Prof) Elizabeth A. Oji