Dorma UK Ltd v Bateman & Ors

Interim springboard relief may restrain the consequences of an unlawful team move, misuse of confidential information, or breach of contractual or fiduciary duty. The claimant must show a serious issue to be tried and, where the injunction may substantially expire before trial, a real prospect of success. It must also identify an existing unfair competitive advantage, its precise nature and likely duration, and demonstrate that the order is proportionate to removing that advantage rather than punishing past wrongdoing. A non-competition covenant may be enforceable where it reasonably protects confidential information and business connections, particularly when narrower restraints would be difficult to police.

Dorma sought urgent interim injunctions against four former employees and their new employer, Arrow Industrial Limited. The application followed the simultaneous resignations of the four employees and their commencement of work for Arrow at a newly established competing branch. Dorma alleged an unlawful team move, misuse of customer information, breach of fiduciary duty, breach of confidentiality, and breach of the first defendant’s restrictive covenants.

The court considered springboard relief, protection of confidential information, an affidavit disclosure order, enforcement of the first defendant’s covenants, and an order restraining Arrow from inducing breaches of the interim orders. A speedy trial had already been arranged for December 2015.

1. Interim approach. Applying American Cyanamid v Ethicon Ltd [1975] AC 396, the court required a serious issue to be tried and then considered adequacy of damages and the balance of convenience. Because much of the relevant restraint would expire before trial, the evidence also required careful assessment of whether there was a real prospect of success.
2. Springboard relief. The court adopted the synthesis in QBE Management Services UK Ltd v Dymoke [2012] EWHC 80; [2012] IRLR 458. Springboard relief is available to remove an unfair competitive advantage obtained through serious breaches of contract, fiduciary duty or confidence. The advantage must still exist when relief is sought and the injunction must be directed to preventing further loss, restoring the competitive position that would otherwise have existed, and lasting no longer than the advantage.
3. The evidence, including the coordinated recruitment, simultaneous resignations, misleading answers, customer-list requests, apparent access to customer information and subsequent customer solicitation, established both a serious issue and a strong provisional case that there had been an unlawful team move. Suspicion alone is insufficient, but the evidence here was a powerful circumstantial case.
4. The court held that the advantage was substantial and continuing. It was not ephemeral, and the claimant had identified a likely period of about 12 months for Arrow to build an equivalent business. The order was therefore made in terms preventing solicitation of customers, poaching or employing specified staff, dealing with restricted customers, and involvement in the competing Bridgwater operation. The wider prohibition on working in the industry was rejected as too broad.
5. Confidential information and covenants. There was a serious issue to be tried concerning misuse of customer lists and other confidential information. The court adopted the contractual definition of confidential information and granted protective injunctions against all five defendants. The six-month non-competition covenant was likely enforceable because it protected confidential information and business connections, was limited geographically and by activities, and was reasonable in time and scope. The court noted that such a covenant may be the most practicable protection where confidentiality is difficult to police.
6. The requested affidavit order was refused. The defendants’ witness statements already addressed the alleged misuse, and disclosure in the expedited proceedings would provide the relevant documentary evidence. Arrow’s proposed undertaking against inducing or permitting breaches was accepted as the appropriate form of relief.