Home | News | Injunction granted against ‘poaching and competing’ employee

Injunction granted against ‘poaching and competing’ employee

January 26th 2022

A logistics company has been granted an injunction against an employee to prevent him poaching its staff and working for a competitor.

Rebecca Armstrong Associate Solicitor in our dispute resolution team reports on this recent case.

The case involved JM Solutions UK Ltd. Its two directors lived in Romania, and since the Covid pandemic they communicated with staff via email and telephone.

The employee, referred to as Dave, was the company’s office and sales manager, and was responsible for dealing with customers and negotiating rates.

His contract of employment contained a post-termination non-competition covenant, a non-solicitations covenant, a non-poaching covenant and a covenant relating to key workers.

Around May-June 2021 Dave began missing out on business opportunities. Customers that had been closed over the pandemic but had informed JM that they were reopening in April 2021, were not coming back or were not seeking as much work.

Dave was the person in contact with those clients. Subsequently, eight of JM’s drivers terminated their contracts.

Around that time, a rival company was incorporated. One of its directors was Dave’s brother-in-law.

In October 2021 Dave served notice terminating his employment. JM became aware of his connection with the rival business. It discovered evidence that Dave had transferred work from JM to the rival, and that he had been telling JM’s customers that it had limited ability to provide services.

There was also evidence that while employed by JM, Dave was working for the rival.

After his resignation he returned his phone with emails and messages wiped.

Dave denied the allegations. The rival business offered undertakings regarding the use of confidential information, delivery up of relevant documents, and preservation of documents.

The court grant JM an interim injunction to restrain Dave from breaching the post-termination restrictive covenants in his employment contract, and a springboard injunction to prevent him and the rival from using confidential information to their advantage.

It held that JM had established that there was a serious issue to be tried. Damages would not be an adequate remedy.

The balance of convenience lay in making the orders sought, making clear that they only applied to JM’s clients or prospective clients. The rival could carry on business with other customers.

If you would like more information about the issues raised in this article please contact Rebecca on 01228 516666 or click here to send her an email.

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