The MTN case that could change employment contracts in Nigeria

For years, restrictive clauses have sat quietly inside employment contracts, often buried among salary, leave, pension, and termination terms. Employees sign them, companies file them, and life moves on.

That’s until an employee decides to leave.

For 10 years, MTN Nigeria Communications Limited and its former Procurement Manager, Theodore Nwabueze Ikpa, have been embroiled in an employment dispute.

On July 9, 2026, the Court of Appeal in Lagos dismissed MTN’s appeal and affirmed the judgement of the National Industrial Court, which had previously awarded Ikpa ₦5.1 million as compensation for the restraint placed on him after leaving the company.

Ikpa joined MTN in May 2002 and worked as a procurement manager until December 2008, when his employment was terminated. In January 2016, almost eight years after leaving the company, he approached the National Industrial Court seeking several remedies.

One of them was ₦10 million in damages over a restriction he said prevented him from taking another job until retirement.

At the centre of the case was Clause 17.3.4 of his employment contract. The clause restricted him for 48 months after his employment ended from being directly or indirectly involved with any competitor in Nigeria.

MTN argued that the restriction was necessary because of the information available to him as a procurement manager, including confidential business information, strategic plans and trade secrets.

Ikpa argued that the clause effectively prevented him from finding alternative employment and caused financial hardship. He also pointed to MTN’s previous legal actions against former employees and their new employers as part of the reason prospective employers were reluctant to hire him.

The National Industrial Court eventually ruled in his favour on the restraint issue. On June 13, 2018, it awarded him ₦5,101,674 as compensation, alongside ₦100,000 in costs.

MTN filed a notice of appeal on February 18, 2021, challenging the decision on four grounds. Among other things, MTN argued that the lower court should not have entertained Ikpa’s claim, that the 48-month restriction was reasonable and that Ikpa had failed to prove that he actually suffered a financial loss.

The appeal would then spend years waiting for its turn. By the time the Court of Appeal finally delivered judgement in 2026, the case had moved far beyond a disagreement over the wording of an employment contract.

What MTN had to prove and why the court was not convinced

The appellate court’s reasoning is important because it did not simply decide that every lengthy restraint is unlawful. Instead, it looked at what an employer has to establish before a restraint of trade can be enforced.

The Court said three requirements had to be satisfied. The employer had to establish a legitimate interest deserving protection. The restriction had to be no wider than reasonably necessary. It also had to avoid injury to the public.

MTN fell at the first hurdle. The company had argued that Ikpa had access to sensitive information, but the court found that MTN had not produced evidence establishing that he actually possessed the kind of confidential information or trade secrets that justified the restriction.

Ikpa had testified that his role did not expose him to such information and that testimony was not disputed under cross-examination. The Court therefore concluded that MTN had failed to establish a defensible interest.

Even if it had, the Court still considered the 48-month restriction sweeping and excessive, particularly because it potentially prevented Ikpa from working with competitors across Nigeria for four years.

That distinction matters in the workplace because restrictive clauses are not necessarily unusual. Amarachi Grace, an HR professional who spoke with Condia, says such clauses are common in corporate employment contracts.

“It’s common, but the duration is too much,” she said.

For Grace, the employee’s role should matter. A senior executive with access to sensitive information presents a different risk from someone in an administrative or front desk role. Restrictions, she argues, should be designed around the actual information and relationships an employee can potentially take with them.

That is where the MTN case becomes particularly relevant. Grace’s view is that a restriction should not simply prevent someone from working in their profession. It should be targeted at genuine competition where there is a legitimate reason for doing so.

For example, a senior business development employee could reasonably be restricted from moving immediately to a direct competitor while still being able to take the same professional skills into another industry.

“You can go and work as a business development manager elsewhere,” she explained. The concern, in her view, should be moving directly into a competing business where sensitive commercial knowledge could matter.

That is a very different proposition from keeping someone away from an entire industry for four years. The Court’s decision also dealt with the other major battle in the case, whether Ikpa had actually suffered loss.

MTN argued that he produced no job rejection letters, interview correspondence or documentary evidence proving that prospective employers rejected him because of the clause.

But the Court accepted Ikpa’s testimony that he had been unable to secure employment, that prospective employers had declined to engage him and that he suffered hardship as a result. It also noted that MTN had not produced evidence showing that he had obtained employment or had opportunities he simply failed to pursue.

The Court therefore declined to rescind the ₦5.1 million award. It also refused to interfere with the lower court’s award of costs. Instead, it ordered MTN to pay another ₦500,000 to Ikpa.

What the MTN ruling could change for employers and workers

The immediate lesson is not that Nigerian companies can no longer restrict former employees. It is that writing a restriction into a contract does not make the restriction automatically enforceable.

Grace believes employers may now have reason to look more carefully at the clauses they already use.

“I think companies will be adjusting it,” she said, particularly because employers need to balance protection of their business with an employee’s ability to earn a living after leaving.

Her practical suggestion is that the restriction should be proportionate to the employee’s role and the business interest being protected. A company protecting genuinely sensitive information has a stronger argument than one imposing a blanket restriction simply because it is afraid of losing an employee to a competitor.

That also puts some responsibility on workers. Rather than focusing on the salary and benefits on offer, she encourages employees to pay attention to what the contract says about life after the job.

Employment contracts are often treated as documents employees either accept or reject. But restrictive clauses can determine where someone is allowed to work years later, which means they can be as consequential as the salary being offered at the start.

For companies, the lesson is equally uncomfortable. A restrictive clause that is too broad may not hold up when contested.

The MTN case took the parties from a termination in 2008 to a lawsuit in 2016, a National Industrial Court judgement in 2018, an appeal filed in 2021 and finally a Court of Appeal judgement in 2026.

That is a long time to discover that a clause designed to protect a business may not survive legal scrutiny. And perhaps that is the bigger warning for Nigeria’s employment space.

Companies will still want to protect their clients, information and competitive advantage. Employees will still move between companies. The difference is that contracts may increasingly have to explain what exactly is being protected, why the restriction is necessary and why the employee should be prevented from working for a particular period.