About a month ago I wrote about how Ryanair’s COO, Peter Bellew, announced he’d be leaving the airline by the end of the year. This was a surprising move.
After all, he was the former CEO of Malaysia Airlines, though made the move to Ryanair in 2017. As he viewed it, returning to Ryanair was “a form of national service.”
We don’t know what exactly happened, though it sure seems like there may have been some friction at the top. It was widely believed that Bellew would eventually become the CEO of Ryanair, particularly since Ryanair CEO Michael O’Leary is switching around his own role, as he steps away from day-to-day operations and instead oversees the Ryanair Group.
About a week after the registration announcement it was revealed that Bellew would become the COO of Ryanair’s biggest competitor, EasyJet. Well, this has now created quite some controversy.
The Journal is reporting that court records show that Ryanair has filed legal proceedings against Bellew in the High Court, though the exact nature of the case isn’t yet known.
I think it’s fairly likely that this has to do with Bellew moving to EasyJet, as O’Leary said the following during a call with analysts last week:
“All of the senior management in Ryanair have pretty long termination or notice periods in their contracts. In Peter’s case, that’s currently six months.
They have a pretty extensive non-compete agreement, which arise from the share option schemes that they have agreed and received over a period of time. So I would not expect any senior manager in Ryanair to be moving to a competitive airline for a reasonably long period of time.
We are in dialogue with Peter about his termination period, but there will be no movement from us on what are reasonably extensive and non-compete agreements after the termination period as well.”
I’ll be very curious to see what comes of this. Bellew is a bright guy and I’m sure he was familiar with his non-compete clause before agreeing to work for EasyJet.
I can’t imagine Bellew was trying to pull a fast one, so is the non-compete clause vague, is Ryanair just trying to be intimidating, or is there more to all of this?
Given that Bellew is expected to be at Ryanair through the end of the year, and is supposed to help with training his replacement, this has gotta be awkward…
(Tip of the hat to Declan)
Why in the world would you allow a vicious racist to deprive an elderly (black) woman of her seat? You are on the wrong side of this issue and you'd better watch out for the negative attention your lack of social ethics will be bringing you.
@Peter:
You've raised an interesting point, which is to say that I have to wonder if he decided that whatever he was offered at Easyjet was good enough to simply take the hit on the share plan...but that disentangling from that would somehow be problematic. One possibility: He offered to "throw away" his shares but Ryanair won't let him in an attempt to handcuff him.
As to the logic, I think it comes down...
@Peter:
You've raised an interesting point, which is to say that I have to wonder if he decided that whatever he was offered at Easyjet was good enough to simply take the hit on the share plan...but that disentangling from that would somehow be problematic. One possibility: He offered to "throw away" his shares but Ryanair won't let him in an attempt to handcuff him.
As to the logic, I think it comes down to a question of how screwed Ryanair is in the medium term over the 737 Max fiasco (which is playing merry hell with everyone, but from what I can tell Ryanair is up there with Southwest in airlines that are in a bad spot because of this). This would be compounded if Ryanair had been planning to lease any MAXes from some of the major leasing companies out there. If that blows their plans going forward, he might well have decided that the share price has no real chance of recovery in the next few years.
And of course, EasyJet flies an all-Airbus 320-family fleet while Ryanair flies an all-Boeing 737-family fleet, so I know who I'd bet on having the better next year or two...
Lol... Funniest thing is that most of the loudmouth here didn't even read, knew, or understand the law itself. You muricans are funny....
Ok, Ireland or the UK. I assume their non-compete clauses are similar in nature that their aren’t enforceable whereas the US they are taken very seriously.
Why are people mentioning the U.K. and U.K. law?
It’s clear from the linked article - to an Irish Newspaper - that this is a case in the Irish Hight Court under Irish law. And the Times (of London) states it’s the High Court in Dublin.
Ryanair is based in the Republic of Ireland and not the United Kingdom.
non-compete clauses in employment contracts are very difficult to enforce, as you can't really FORCE someone to work for your company.
If they successfully are able to withhold some funds (through his stock options or whatever) I would suggest that Bellew and Easyjet have already discussed this potentiality, and Easyjet will reimburse him for any costs. Ryanair probably also know this would happen, and will be glad to rip whatever money they can from...
non-compete clauses in employment contracts are very difficult to enforce, as you can't really FORCE someone to work for your company.
If they successfully are able to withhold some funds (through his stock options or whatever) I would suggest that Bellew and Easyjet have already discussed this potentiality, and Easyjet will reimburse him for any costs. Ryanair probably also know this would happen, and will be glad to rip whatever money they can from their competitor Easyjet (albeit indirectly).
Not so much personal, just the usual fun and games of business :)
Oh my!!! Now Khashoggi will be a new word like going Postal. “He got a Khashoggi”
@losingtrader
He is smart enough to know that non compete is rubbish.
He will be sought-after by many airlines for his skills and none of them will trust his loyalty.
He will end up as a bounty hunter for some airline in Africa or risk a Khashoggi and betray ME3
How is this guy so great everyone wants to hire him?
I’m with BrewerSEA: “ It’s much more likely the language of the contract forbids the move, but he doesn’t believe it’s enforceable and planned with the assistance of Easyjet to litigate that question. Corporations love illegal non competes.”
O’Leary’s statement suggests the non-compete arises from the share option plan, which is where I have seen them, as opposed to his employment contract. As Bellow has not been with Ryanair very long it is possible that none, or relatively few shares, have vested added to which the share price has declined since 2017 (almost halved) (Unionization, strikes, and B737MAX).
There may therefore be no valid consideration for the non-compete clause, which would explain why...
O’Leary’s statement suggests the non-compete arises from the share option plan, which is where I have seen them, as opposed to his employment contract. As Bellow has not been with Ryanair very long it is possible that none, or relatively few shares, have vested added to which the share price has declined since 2017 (almost halved) (Unionization, strikes, and B737MAX).
There may therefore be no valid consideration for the non-compete clause, which would explain why he was comfortable accepting the EasyJet offer and the share price declines mean any share options have a negative value.
The long departure date suggests he is honouring the notice provisions of the employment contract but I suspect he will be on “gardening leave” until then, i.e. working at home.
As with Malaysian, he likely realized he was in an impossible work environment that he would have no ability to change so, as we all should do, best move on in search of something better.
This guy is all over the place. Literally. I'm guessing that he was lured back to Ryanair with the promise of the big job. When it became clear he wasn’t getting it, he decided to burn ALL the bridges and head on over to their nearest competitor. Seems fairly straightforward but he better not mess things up too badly at Easyjet or he'll be totally unemployable. Although most middle aged C-suite white dudes only seem...
This guy is all over the place. Literally. I'm guessing that he was lured back to Ryanair with the promise of the big job. When it became clear he wasn’t getting it, he decided to burn ALL the bridges and head on over to their nearest competitor. Seems fairly straightforward but he better not mess things up too badly at Easyjet or he'll be totally unemployable. Although most middle aged C-suite white dudes only seem to fail up so who knows, he'll probably be CEO of IAG before the end of the year!
Ben, I think your conclusion that Bellew wasn’t trying to pull a fast one is probably wrong. The sole purpose of a noncompete would be to prevent him moving directly to a competitor like Easyjet. It’s much more likely the language of the contract forbids the move, but he doesn’t believe it’s enforceable and planned with the assistance of Easyjet to litigate that question. Corporations love illegal non competes.
A lot of non-compete clauses aren’t even enforceable in the UK. Especially if it is particularly wide ranging or lengthy. Hard to say without seeing the actual contract though.
"So I would not expect any senior manager in Ryanair to be moving to a competitive airline for a reasonably long period of time."
Any non-compete clause would be in writing in a contract, and would be a specific, measurable period of time. A "reasonably long period of time" is not something any court is going to be able to enforce reasonably. If Ryanair/O'Leary didn't have the non-compete clause in Bellew's contract, then shame on them.
Why creating such a situation? Mr Bellows career may be over when people see how he behave. Who wants to do business with him or hire him? Maybe he realised it is his last job and don’t give a shit of etiquette and ethics. Clearly a snakes behavior if so. Hard to see that he do not have most responsibility to the fight.
Do executives really remain at work when signed to a main competitor ? Very strange
In the UK a non-compete isn’t really worth the paper it is written on.
"Alright, so just do the opposite of what I do and you'll be in the red in no time! That has nothing to do with me being your future competitor!"
Is how I imagine the training will go haha
What is the point of the word "allegedly" in the headline?