….upholds N5.1m award against MTN

The Court of Appeal in Lagos has reinforced the limits of employers’ power to restrict former employees from taking up new jobs, ruling that post-employment contracts cannot be used to impose unreasonable barriers to workers’ livelihoods.

The appellate court dismissed an appeal by MTN Nigeria Communications Limited and upheld a N5.1 million compensation award in favour of Theodore Nwabueze Ikpa, its former proceurement manager in a judgment with significant implications for employer governance, talent mobility and the enforcement of non-compete clauses.

The unanimous decision, delivered by Justice Danlami Zama Senchi in Appeal No. CA/LAG/CV/319/2021, affirmed the June 13, 2018 judgment of the National Industrial Court of Nigeria, Lagos Division. The lower court had awarded Ikpa N5,101,674 as compensation and N100,000 in costs.

The ruling highlights the growing importance of balancing employers’ legitimate interests in protecting confidential information, trade secrets and commercial relationships with workers’ rights to pursue employment and earn a living after leaving an organisation.

The court held that the four-year restrictive covenant imposed on Ikpa was unreasonable and effectively prevented him from securing alternative employment after his exit from the telecommunications company.

The Court of Appeal also awarded an additional N500,000 in costs against MTN.

Background of the case

The dispute arose from the termination of Ikpa’s employment as procurement manager in…