By Lummina Law Firm
2 September 2026
Practical perspective for the decisions ahead.
MTN NIGERIA COMMUNICATIONS LTD v. THEODORE NWABUEZE IKPA
Appeal No. CA/LAG/CV/319/2021
The Court of Appeal, Lagos Division, dismissed MTN Nigeria's appeal and upheld a ₦5.1 million compensation award to a former Procurement Manager over an unreasonable post-employment restraint. The judgment reinforces an important principle: A restrictive covenant must be reasonable to be enforceable.
WHAT HAPPENED?
Ikpa's employment was terminated by MTN in 2008. His employment contract contained a four-year post-employment restrictive covenant. He argued that the restriction effectively prevented him from securing alternative employment. The National Industrial Court agreed that the restraint was unreasonable and awarded ₦5,101,674 as compensation, alongside costs.
MTN APPEALED
MTN argued, among other things, that:
The covenant was reasonable. Ikpa had voluntarily agreed to it. He had not proved actual loss. The compensation awarded was excessive.
The Court of Appeal rejected MTN's challenge and dismissed the appeal.
THECOURT'SKEY MESSAGE A SIGNATURE DOES NOT AUTOMATICALLY MAKE A RESTRICTIVE COVENANTENFORCEABLE.
The employer's legitimate interests matter. But so does the former employee's ability to earn a living.
A post-employment restriction must be capable of surviving scrutiny as to its reasonableness and legitimate purpose.
EMPLOYERS ARE NOT POWERLESS
This decision does not mean that every non-compete or restrictive covenant is invalid. Employers can legitimately seek to protect interests such as:
- Confidential information
- Trade secrets
- Customer relationships
- Goodwill
- Proprietary business interests
- The problem arises when the restriction
- goes beyond what is reasonably necessary
- to protect those interests
WHAT MADE THIS CASE SIGNIFICANT?
Ikpa gave evidence that prospective employers were reluctant to hire him because of the restrictive covenant. The Court noted that his evidence was not challenged under cross-examination or contradicted by MTN. The Court therefore accepted the evidence as credible and found that the restraint had caused compensable hardship. Unchallenged evidence can have consequences.
WHAT SHOULD EMPLOYERS DO DIFFERENTLY?
Before inserting a restrictive covenant into an employment contract, ask:
WHAT LEGITIMATE BUSINESS INTEREST ARE WE PROTECTING? HOW LONG DOES THE RESTRICTION REALLY NEED TO LAST? WHAT GEOGRAPHIC AREA SHOULD IT COVER? WHAT ACTIVITIES SHOULD ACTUALLY BE RESTRICTED? IS THE RESTRICTION PROPORTIONATE TO THE INTEREST BEING PROTECTED?
A clause drafted simply to prevent an employee from joining a competitor may be far harder to defend than one carefully designed around a legitimate proprietary interest.
FOR EMPLOYEES
Receiving a restrictive covenant does not necessarily mean:
“I cannot work anywhere else.”
The enforceability of the clause depends on its terms, purpose, scope and the applicable legal principles. Before accepting that a restriction is binding, have the clause legally reviewed.
THE BUSINESS LESSON DON'TUSEAHAMMERWHENASCALPEL WILLDO.
A blanket restriction that effectively removes a former employee from the labour market may create more legal risk than protection. The better approach is targeted protection of genuinely legitimate business interests. Protect the business. But draft the restriction reasonably.
THE TAKEAWAY — YOUR EMPLOYEE'S SIGNATURE IS NOT A BLANK CHEQUE.
A restrictive covenant may be challenged where it goes beyond reasonable protection of legitimate business interests. For employers, the question is not: “Did the employee sign it?” It is: “Can we justify the restriction?”
