Gutermann Messtechnik & Anor v Hartley & Anor (Rev 1)

An employee’s general commercial knowledge is not ordinarily protected after employment ends merely because it was confidential during employment. Protection is available for specific trade secrets and highly confidential information. An employer may also obtain delivery up and an injunction preventing use of documents improperly retained by a former employee, including customer lists and similar material, even where the underlying information is not itself a trade secret. The court may confine an injunction to specific information and a limited period where the order is broader than necessary.

The claimants sought relief against a former employee and his wife concerning confidential information, alleged misappropriated monies, bonus entitlement, ownership of shares in the second claimant, and an alleged entitlement to a 4% interest in the wider business. By consent, the trial dealt with selected issues in a first phase. The court determined the claims for continuing injunctive relief, delivery up, the basis of any bonus entitlement, the alleged nominee arrangement and the 4% interest. The financial claims relating to alleged misappropriation were reserved for a later phase.

1. Bonus. The alleged 2003 agreement giving Mr Hartley 30% of the profits of the whole leak-detection business was rejected. The evidence was inconsistent with such an agreement. The written 2000 Agreement remained the basis of any bonus claim from 2003, subject to a possible quantum meruit issue for the period after November 2009, which was reserved for further argument.
2. Shares. The evidence established that Mr Hartley held the shares in Gutermann UK Limited as nominee for Mr Gutermann. The company had been established within the Gutermann group, was funded and controlled by Mr Gutermann, and Mr Hartley’s subsequent correspondence referred to the shares as held in trust. The claim that Mr Hartley was the beneficial owner therefore failed.
3. 4% interest. Mr Hartley’s claim failed. The signed note of the January 2010 meeting correctly recorded that he returned his rights to 4% of the group shares.
4. Confidential information. Applying the three categories identified in Faccenda Chicken Ltd v Fowler [1987] Ch 117, only information amounting to specific trade secrets or equivalent highly confidential information warranted protection after employment. Mr Hartley had no detailed technical knowledge of the equipment. His retained documents, however, belonged to the claimants and could not lawfully be kept or used, particularly to assist a competitor. The principles concerning copied or retained customer lists in Robb v Green [1895] 2 QB 315, Wessex Dairies v Smith [1935] 2 KB 80 and Bullivant v Ellis [1987] FSR 172 supported an injunction and delivery up.
5. The very wide interim injunction would probably have been narrowed had Mr Hartley been represented. Following delivery up, the court doubted that any continuing order was necessary, but was prepared to consider a short order directed to specific confidential information.

First instance decision. The judgment does not state any prior appellate decision.