Hurray, F1’s most successful aerodynamicist has brought employment law (back) into the mainstream! Regardless of what he does next, Newey’s “shock” departure from Red Bull has created some interesting news. I’ve found the reporting mixed: Newey’s amazing early exit; contracts being “broken”; misunderstanding of the application of non-competes.
❓What's actually happened?
Reported that Newey has a fixed-term contract (either employment or consultancy) until end of 2025 + 12 month non-compete
Previous F1 staff moves teach us that fixed-term arrangements with no notice periods are common in F1
Newey has resigned, seemingly in breach of contract, and the two sides have negotiated an approx. 12-month notice / garden leave period
Likely that his restrictive covenants (eg non-compete) are reduced by any time spent on notice / garden leave
Logically, he would then be free to leave with no restrictions in Q1 2025 instead of Q1 2027
🏆 Who wins?
Everyone (including fans!). If I was Red Bull, I’d be happy with the result (unlike much of what I’ve seen reported). And Newey gets the change he wants.
You can’t force someone to work, so better to negotiate a sensible arrangement than hold a person to an unrealistic long-term fixed contract.
It’s extremely hard, if not impossible, to enforce a non-compete (/garden leave) longer than 12 months even if you had the appetite for a lengthy / expensive court battle.
He almost certainly knows too much. Doing a deal is better than a public fight.
Red Bull feels the hyper car project is consummate to Newey’s skills and so low risk of a constructive dismissal claim that would cause his restrictive covenants to fall away.
Unlike a “normal” business, Red Bull have the F1 Financial Regulations to consider. Even if Newey falls within the top 3 personnel who are not included in the “cost cap”, it’s still beneficial to the overall position vs paying someone out long-term.
Ultimately, this seems straightforward for a senior departure. Red Bull have (legally and practically) maximised Newey’s time away from F1 projects. Newey gets to leave broadly when he wants given his senior position.
🔮 What does the future look like?
More importantly, F1 could see big changes (more competition?) with global attitudes shifting towards restrictive covenants / non-compete clauses. The US is turning against them. The UK Government has consulted on restricting them to 3 months. That would have a massive effect on the F1 workforce. And potentially create jurisdictional differences between teams depending on home base (and another reason why Andretti would be sensibly based in the UK (for now)).
Hopefully we can all look forward to an interesting Miami GP!