White Digital Media Ltd v Weaver & Anor

Interim restraint of post-termination competition requires an arguable case that the covenant protects a legitimate business interest and extends no further than reasonably necessary. A covenant restricting a former employee from employing another worker in a competing business may be unenforceable where it indirectly and significantly restricts that worker’s ability to earn a living, particularly where the worker is not a party to the proceedings. Customer restrictions must be confined to customers with whom the employee had relevant dealings or influence. Confidential-information injunctions must identify the protected information with sufficient precision and require a real risk of future misuse.

The claimant sought interim injunctions against its former regional director and a competing publisher. It relied on contractual restraints concerning the engagement of former colleagues, dealings with customers and the use of confidential information. The defendants resisted the applications but did not oppose an order requiring an affidavit explaining the handling and whereabouts of the claimant’s documents and information.

The issues were whether the restraints were enforceable and whether the claimant had shown a sufficient case and future risk to justify interim relief.

1. Applications for interim injunctions were governed by American Cyanamid v Ethicon, subject to consideration of the likelihood of success where required by the circumstances.
2. Clause 3 of the Deed was unenforceable because it was too broad. In any event, the restraint on employing or engaging a “Critical Person” significantly interfered with the ability of Mr Norris and Mr Mitchell, who were not parties to the proceedings, to earn their living as they chose. The claimant had not shown an arguable case for those orders.
3. The customer restrictions were too wide because they were not confined to customers with whom the former employee had dealt or over whom he had influence.
4. The claimant showed a good arguable case of past breach of confidence, but not a good arguable case of a real risk of future breach. Some information had entered the public domain or had been voluntarily disclosed to the defendants. The proposed injunctions were also insufficiently precise.
5. The court made the unopposed affidavit and delivery-up orders, but refused the other injunctions and gave directions for the action’s further progress.