Former Ryanair operations chief Peter Bellew free to join rivals EasyJet, judge rules
Ryanair’s operations chief Peter Bellew can join the company’s arch rival EasyJet after Mr Justice Senan Allen held in the High Court today that a clause in the operations manager’s work contract restraining him from working for another airline for 12 months is unenforceable.
Judge Allen said Ryanair had sought to compel Mr Bellew to comply with a covenant that he would not work for a year following termination with Ryanair and, while Ryanair had proved a legitimate interest in exacting the covenant from Bellew, it went beyond what Ryanair had shown to be justified.
The judge said the covenant would prevent Mr Bellew from taking up employment with any European airline and Ryanair had not shown its interests to extend beyond those airlines in competition with it in the low cost or low fare sector to those operating in the flag or high cost sector.
Judge Allen said the legitimate interest of Ryanair in restraining Mr Bellew from taking up alternative employment was limited to roles which would risk the disclosure or use of its protectable information.
“I find that the restraint on employment in any capacity goes beyond that interest and has not been shown to be justifiable,” Judge Allen said. “I find that the covenant to which the defendant (Bellew) for valuable consideration freely agreed is, as a matter of law, void and unenforceable as an unjustified restraint of trade.”
In dismissing Ryanair’s legal demands that Bellew be restrained by the covenant he signed, Judge Allen found that Bellew was not unfairly or unreasonably treated by Ryanair boss Michael O’Leary in excluding him from participating in the 2019 round of share options.
“The commercial morality of (Bellew’s) behaviour is not material to the construction of the clause or the application of the law,” Judge Allen said.
Ryanair had argued that Bellew possessed information of competitive value and that he was bound by the covenant. Former Malaysia Airlines boss Bellew denied he was subject to the covenant and planned to begin work with EasyJet in the New Year after having completed a six-month notice period of his resignation from Ryanair.
Judge Allen had heard over eight days of evidence that Bellew considered himself “a dead man walking” following a March performance review and had resigned after having been ordered to work at Ryanair’s Austrian business.
Bellew had told the court he had been shocked and devastated when O’Leary in March had stated that his position as Chief Operations Officer would be reviewed after 12 months unless his performance had significantly improved.
That was what he had understood to mean he was “a dead man walking”.
O’Leary in turn had denied he was trying to force Bellew out stating that if he had wanted him out he would have removed him.
Bellew, who claimed in court he had intended to stay at Ryanair until retirement, had finally decided to quit in July after having been made an offer by EasyJet. He claimed information he had regarding Ryanair’s operation would be of limited use to EasyJet because Ryanair operated in a unique way and disclosed its costs publicly in annual accounts.
In his reserved judgment Mr Justice Allen said Mr Bellew had signed a contract to commence working with EasyJet on January 1, 2020.
