Petter v EMC Europe Ltd & Anor

Section 5 of Regulation (EU) No 1215/2012 is to be interpreted autonomously and purposively. A dispute about benefits granted by a parent company may relate to an employee’s contract of employment where the benefits reward, retain and incentivise the employee for the group’s benefit. The parent may then be an employer for jurisdictional purposes, even though it is not the employer under domestic law.

Where Section 5 applies, a pre-dispute foreign exclusive jurisdiction clause has no legal force before the English court. An anti-suit injunction should ordinarily restrain proceedings in a non-Member State when that is necessary to protect the employee’s statutory right to be sued only in the courts of the Member State of domicile.

Mr Petter left EMC Europe Ltd to join a competitor. EMC Corporation, the American parent company, began proceedings in Massachusetts seeking to rescind stock awards under its Stock Plan. Mr Petter brought English proceedings challenging restrictive covenants and the rescission provisions, and sought to restrain the Massachusetts proceedings.

Cooke J held that the English court had jurisdiction under Section 5 of Regulation (EU) No 1215/2012, notwithstanding the Massachusetts exclusive jurisdiction clause, but refused an anti-suit injunction: [2015] EWHC 1498 (QB). EMC appealed on jurisdiction and Mr Petter cross-appealed on the injunction. The central questions were whether the stock arrangements related to an individual contract of employment and whether an injunction should protect the resulting statutory jurisdiction.

1. EMC’s appeal was dismissed and Mr Petter’s cross-appeal was allowed. The judge correctly held that the English court had jurisdiction. He erred in refusing an anti-suit injunction.

2. The concepts of employer, employee and employment in Section 5 of Regulation (EU) No 1215/2012 have an autonomous meaning. The section protects employees as the economically and socially weaker party. Its application therefore depends on the substance of the relationship, rather than its domestic-law form.

3. The restricted stock unit agreements were bilateral contracts between Mr Petter and EMC. The stock awards were available because of his employment, rewarded past work, encouraged future work and assisted the retention of valuable employees. The dispute therefore related to his employment contract within article 20(1). EMC was consequently an employer for the purposes of the Regulation, although it was not his employer in ordinary English-law terms. Samengo-Turner was binding and indistinguishable.

4. Articles 22(1), 23(1) and 25(4) required the court to disregard the Massachusetts exclusive jurisdiction clause. Mr Petter had much the better argument that Section 5 applied, and the court had jurisdiction over EMC.

5. Following Samengo-Turner, an anti-suit injunction should ordinarily be granted where an employer pursues proceedings in a non-Member State and the foreign court cannot give effect to the employee’s statutory rights under Section 5. The judge could not depart from that approach on grounds of comity or on an unsupported assumption that EMC would disregard an English order. The prohibition on anti-suit injunctions between Member States, explained by Turner v Grovit, did not apply to proceedings in Massachusetts.

6. Vos LJ agreed that the court was bound to grant relief, while observing that the balance between statutory employment protection and a freely agreed jurisdiction clause might otherwise be more nuanced. Sales LJ agreed and added that Section 5 gives effect to a clear public policy which displaces party autonomy for employment disputes.

• Court of Appeal (Civil Division): EMC’s jurisdiction appeal was dismissed and Mr Petter’s appeal against refusal of an anti-suit injunction was allowed: [2015] EWCA Civ 828 .
• High Court, Queen’s Bench Division: Cooke J held that the court had jurisdiction under Section 5 of Regulation (EU) No 1215/2012, but refused an anti-suit injunction: [2015] EWHC 1498 (QB) .