When US non-competes collide with UK law

We’re not in Kansas anymore,” said Dorothy in The Wizard of Oz (1939). That line echoed in London’s High Court in October when Mr Justice Ritchie ruled that Tom James, the world’s largest personalised tailoring company, could not enforce a 12-month non-compete against former UK employee Max Potter. The decision shows how lengthy restrictive covenants contained in US employment contracts rarely translate into enforceable UK covenants, whatever American senior management may wish.

Tom James is known for its hard-line approach to non-competes. Its US contracts include 24-month restrictions, and it routinely instructs Baker McKenzie to pursue ex-employees who set up in competition. Judge Ritchie criticised the firm’s conduct, noting it hand-delivered a letter of claim to Potter’s partner on a Sunday—just two days after he resigned. The company’s campaign against Potter lasted five months and cost them more than £600,000 in legal fees, which are now irrecoverable.

Max Potter, 28, had worked for Tom James UK for almost eight years as a visiting tailor, selling £2,500 bespoke suits, shoes and ties to senior professionals in London’s financial and legal sectors. While small in the UK, Tom James is a US giant, headquartered in Tennessee with a global turnover of about $500 million.

In 2022, following a pay review, Tom James UK introduced expanded restrictive covenants for its London salesforce: with 12-month non-solicitation, non-dealing, and non-poaching covenants, plus a 12-month global non-compete. Max Potter previously had six months non-compete. US management said they wanted “standardisation,” reasoning that if 24 months was reasonable in America, 12 months must be reasonable in the UK.

However, the non-compete clause in the UK contracts contained neither a geographical limit nor any provision linking it to the work Potter did. It could have barred him from any role in any competing business worldwide—even, hypothetically. It would have prevented Max from working as a delivery driver, for Harrods, for example or even, conceivably, serving in a shop in Kansas City selling competitive products. The Judge decided that this was manifestly excessive in its scope. 

When Potter resigned in May 2022 with no job to go to, he offered Court Undertakings to honour 12-month non-solicitation and non-dealing covenants regarding his clients. Tom James rejected this and sued, obtaining an interim injunction in July 2025 to enforce the 12 month non-compete.

A “speedy trial” was ordered to decide whether the clause was a lawful restraint of trade and whether the injunction should stand and also to decide whether Max Potter had acted in breach of his employment duties. Most employees would have caved in at this stage, but Potter—represented by Constantine Law and Stefan Lewinski—defended the claim.

Tom James argued that because 24-month restrictions were standard in its US contracts, 12 months in the UK was reasonable. It claimed the restriction protected customer connections and that Potter, having signed the contract, should be held to it. Under UK law, however, the position is more nuanced. Restrictive covenants amount to unenforceable restraints of trade unless the employer proves they go no further than is reasonably necessary to protect a legitimate business interest. The burden of proof lay with Tom James, and it failed to show it.

Mr Justice Ritchie decided on a Judgment handed down on 4 November 2025 Tom James UK Ltd v Potter [2025] EWHC 2873 (KB) (04 November 2025) in which he ruled that the restrictive covenant against competition in the 2022 contract went “ further than is reasonably necessary to protect the Claimant’s legitimate business interests and is unenforceable.” He found that “the duration; the range of business being protected; the range of competing businesses and the roles banned were all not reasonably necessary.” He criticised the US management’s evidence and its lack of data on customer buying cycles or justification for the restriction’s breadth.

For Potter, the outcome was life changing. Had he lost, he would have been bankrupt. Delivering his oral judgment on 21 October 2025 (later confirmed in writing), the judge told Potter he was “free to work again.” The injunction was discharged, and the court found he had not breached his employment contract.

The ruling offers clear lessons for businesses and their lawyers —especially US multinationals with UK operations and employees.

In particular that US employers need to take care to consider the implications of each restrictive covenant it applies to its UK staff.  This is because the UK courts will subject these covenants to forensic examination to see whether these are reasonable restraints of trade. Although Tom James has a 24-month restrictive covenant in its US contracts of employment, a 12-month restrictive global non-compete in its UK contract of employment was considered by the Court as an unenforceable restraint of trade.  The company was utterly unable to justify it as a legitimate restriction in the UK. What seems commercially standard in the US can be entirely unreasonable under English law. Overseas companies and their lawyers need to understand the nuisances of the UK courts. 

And secondly that “One size fits all” approach to the introduction of new restrictive covenants will invite challenge. Tom James applied identical restrictions to all its employees, regardless of whether they were a senior manager with access to confidential information as opposed to a mid-ranking employee. The court viewed this as heavy-handed. Mr Justice Ritchie was particularly critical of the failure to consider how a 12-month non-compete might affect ordinary employees: “Being out of work in his or her field of excellence for 12 months might (and probably would) cause default on a mortgage, loss of a home, a car, the ability to care for children… There was no evidence that the Claimant thought about that at all.”

The High Court’s decision in Tom James UK Ltd v Potter is therefore a textbook warning about exporting US employment expectations and practices to the UK. Restrictive covenants must be tailored to UK employment law, proportionate in scope, and supported by evidence if they are to survive judicial scrutiny. For Max Potter, the case meant financial survival and professional freedom. For Tom James, it demonstrates that overly oppressive covenants can be struck down, generating vast legal costs and reputational damage.

As Dorothy reminded us, we’re not in Kansas anymore. In the Max Potter trial Tom James found out to their cost that they weren’t in Tennessee either.

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