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Adam Solomon and Charlotte Davies succeed in obtaining novel form of springboard relief. Read a copy of the judgment in Dorma UK Ltd v Bateman & Ors

Adam Solomon and Charlotte Davies successful in obtaining novel form of springboard relief. Read a copy of the Judgment HERE.

Springboard relief and orders for affidavit evidence

In the recent case of Dorma UK Ltd v Bateman & Ors (2015) the High Court granted a springboard injunction against a team of ex-employees to restrain them from working for a competitor, and poaching customers or employees, in the terms of restrictive covenants found in only one of their employment contracts. It also granted injunctions to protect Dorma’s confidential information, but declined to make an order for the provision of affidavit evidence on the basis that there would be a speedy trial.

Facts

The claimant, “C”, manufactured and installed commercial doors. It had a branch in Somerset run by the first defendant (“D1”). His contract contained restrictive covenants including a geographically limited non-compete clause, non-solicit and non-deal clauses, and a non-poach clause in respect of employees. D2 was a surveyor at the same branch, and D3 and D4 were service co-ordinators also based at that branch who handled customers and complaints. D2-D4 had no restrictive covenants in their contracts, although they did have provisions relating to confidential information.

D1 approached a competitor of C, D5, with a view to working for them. He was offered a position and shortly afterwards D2, D3 and D4 also approached D5 and were offered employment. They all resigned on the same day but did not tell C they were going to D5. During his notice period, D1 was required to return his company laptop and phone. When he did so, he had wiped them of all information. During their own notice periods, D3 and D4 made various requests for confidential information ostensibly for the purposes of their role. A few days after the employees left C, D5 opened a new Somerset branch just a few miles away, in which D1-D4 all began work in competition with C.

C applied for interim injunctions, arguing that there had been an unlawful team move orchestrated by D1, enabling D5 to launch a new Somerset office with a ready-made team and to make use of C’s confidential information. The Ds’ case was that they had been unhappy in their employment with C, and that they had all left independently.

Springboard relief reflecting restrictive covenants

C applied for, amongst other things, springboard relief against Ds. It put forward two alternative forms of springboard relief: (i) an order that D1 to D4 must not be employed, engaged or involved in the business of manufacturing and installing commercial doors, or in any way assist any other defendant in such business; (ii) alternatively, an order against D1 to D4 in the form of D1’s contractual restrictive covenants, including non-compete, non-solicit, non-deal and non-poach covenants.

C relied on the case of Devere Holding Co Ltd v Belgravia Wealth Management Europe Kft [2014] EWHC 3189 (QB) as authority for this approach, in particular for ordering springboard relief in a team move case in the form of restrictive covenants, even where individual defendants’ contracts did not contain any post termination restrictions.

The High Court carried out a review of the relevant authorities relating to springboard relief, and ultimately held that:

 

• There was a serious issue to be tried, and a real prospect of success for C at trial. The evidence in this case gave rise to a strong inference that there had been an unlawful team move.
• Springboard relief was available to prevent economic loss caused by former staff members taking unfair advantage of a breach of their contract terms, and its purpose was to restore a level playing field.
• It was not confined to cases of breach of confidence.
• C was entitled to springboard relief in the alternative form, following the approach in Devere.

 

The significance of this decision is that, combined with Devere, there is now High Court precedent for using one defendant’s non-compete covenant to frame the scope of springboard relief against other defendants involved in a coordinated team move. This approach can be used to present the court with an alternative to a wide-ranging springboard order that may have the effect of preventing an individual working at all, as non-compete covenants are frequently more targeted. Such an order can therefore be less oppressive than a ‘freestanding’ form of springboard relief, whilst still serving the purpose of restoring a level playing field following an unlawful team move.

Confidential information

The High Court also held that C was entitled to an interim order for the delivery up of its confidential information and an injunction to prevent its misuse. However, it declined to order Ds to produce affidavits setting out what confidential information they had, and what use they had made of it.

The Court considered the well-known case of Aon Ltd v JLT Insurance Brokers Ltd [2010] IRLR 600 and held that:

 

• In the circumstances of the case, and having regard to the Aon guidance it waswithin the court’s discretion to order affidavit evidence in relation to confidential information.
• However, as there was an order for a speedy trial and directions for imminent filing of defences and exchange of witness statements, there was no practical utility in ordering affidavits, as the defences and witness statements should contain that information in any event.

 

This is an interesting approach and one that should be noted by practitioners dealing with protection of confidential information. In particular, that where a speedy trial is ordered, this may mean the court is reluctant to order affidavit evidence notwithstanding that the stringent guidance in Aon (above) has been met.

Adam Solomon and Charlotte Davies were instructed by Hill Dickinson LLP and appeared for the Claimant, Dorma UK Ltd.