Client Story

Court proceedings avoided following alleged breach of restrictive covenants

3rd May 2022

If a recent recruit is pursued by their former employer for breaches of restrictive covenants, what steps can you take to protect your new employee and your business?

In a recent case, we acted for a senior employee in the insurance brokerage sector who, having moved to a competitor, was pursued by his former employer. His new employers wanted to protect their key new recruit and were concerned about the potential business implications. We were able to urgently assist.

It was alleged that our client had:

  • Orchestrated a ‘team move’ by persuading employees under his management to move to the competitor with him
  • Solicited business from clients of the former employer
  • Wiped his company mobile phone before handing it back to his former employer
  • Misappropriated confidential information belonging to the previous employer

Our client’s former employer threatened issuing a High Court claim seeking damages for breach of his employment contract, breach of confidence and breach of fiduciary duties. The former employer also threatened applying for an injunction. Court proceedings were drafted, and a claim was close to being issued.

On behalf of our client, we engaged in pre-action correspondence with his former employer’s solicitors, highlighting flaws in the threatened claim. We also advised our client to provide undertakings to his former employer, staving off the threatened injunction.

A period of negotiation followed, resulting in settlement terms being reached in respect of the underlying damages claim. Under the settlement terms, our client made a contribution towards the former employer’s legal costs. However, the time, expense and stress associated with court proceedings was avoided, allowing him to focus on the next chapter of his career with his new employer.

For the new employer’s part, it was relieved to resolve the dispute so swiftly, whilst avoiding any allegations that it had in any way encouraged or assisted the employee to breach his employment contract.

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