The second defendant, whilst still during his notice period to leave employment by the plaintiff, began to make arrangements to start his own competing business, and solicited future business from a customer of the plaintiff. The plaintiff sought an interlocutory injunction.
Held: The second defendant was free to set up such a business even whilst employed by the plaintiff. Though he might be in breach of contract by soliciting customers in the way he had, this was not an issue suitable for the interlocutary relief sought. A court should be careful to find a balance between the plaintiff’s rights over its own confidential material, and the defendant’s right to make use of his technical knowledge and experience to make his living.
Scott J discussed the enforcement of restrictive covenants in employment contracts: ‘The use of confidential information restrictions in order to fetter the ability of these employees to use their skills and experience after determination of their employment to compete with their ex-employer is, in my view, potentially harmful. It would be capable of imposing a new form of servitude or serfdom, to use Cumming-Bruce LJ’s words [in G D Searle and Co Ltd v Celltech Ltd [1982] FSR 92], on technologically qualified employees. It would render them unable in practice to leave their employment for want of an ability to use their skills and experience after leaving. Employers who want to impose fetters of this sort on their employees ought in my view to be expected to do so by express covenant. The reasonableness of the covenant can then be subjected to the rigorous attention to which all employee covenants in restraint of trade are subject.’
As to the use of injunctions: ‘These past breaches of duty . . cannot, in my judgment, sustain an interlocutory injunction on their own account. Whether an injunction, interlocutory or otherwise, can ever be justified on the ground that the grant is necessary in order to deprive a contract breaker of the fruits of his breach of contract, I regard as highly questionable.’
Judges:
Scott J
Citations:
[1987] FSR 330
Jurisdiction:
England and Wales
Citing:
Cited – G D Searle and Co Ltd v Celltech Ltd CA 1982
The court was asked as to an employee’s covenant now said to be in restraint of trade.
Held: In disputes between employers and ex-employees courts will usually seek to protect the rights of employees to advance their chosen trade and . .
Cited by:
Cited – UBS Wealth Management (UK) Ltd v Vestra Wealth Llp QBD 4-Aug-2008
The court considered the grant of ‘springboard relief’ and said: ‘In my judgment, springboard relief is not confined to cases where former employees threaten to abuse confidential information acquired during the currency of their employment. It is . .
Cited – Helmet Integrated Systems Ltd v Tunnard and others CA 15-Dec-2006
Whilst employed by the claimants as a salesman, the defendant came to want to develop his idea for a modular helmet suitable for fire-fighters and others. He took certain steps including showing the proposal confidentially to a competitor, and then . .
See Also – Balston Ltd v Headline Filters Ltd and Another ChD 1990
The claimant, a manufacturer of filter tubes, employed the defendant as a director. He gave notice to leave, but during his notice period, he was contacted by a customer who informed him of a meeting between that customer and the company at which . .
Cited – Caterpillar Logistics Services (UK) Ltd v Huesca De Crean QBD 2-Dec-2011
The claimant sought an order to prevent the defendant, a former employee, from misusing its confidential information said to be held by her. Her contract contained no post employment restrictions but did seek to control confidential and other . .
Lists of cited by and citing cases may be incomplete.
Employment, Litigation Practice
Updated: 18 May 2022; Ref: scu.432829