Argus Media Ltd v Halim

Restrictive covenants are enforceable only so far as reasonably necessary to protect legitimate business interests assessed when the employment contract was made. Competition does not require identical or interchangeable products. Similar or sufficiently comparable services may compete where they target overlapping markets and customers. A non-compete clause may be justified where confidentiality and customer-connection covenants would be difficult to police. Preparatory steps become unlawful where they impair the employee’s ability to serve faithfully, involve misuse of confidential information, or actively promote a competing business. Springboard relief requires proof of a continuing unfair competitive advantage and must be carefully confined.

Argus Media Ltd sought final injunctions against its former employee, Dr Mounir Halim. It alleged breaches of fidelity, confidence and post-termination restrictions arising from the establishment of Afriqom, a competing fertiliser price-reporting business.

The issues included whether Afriqom competed with Argus, whether the restrictions were valid, whether Argus’s access to Dr Halim’s work emails amounted to a repudiatory breach, whether confidential information had been misused, and whether springboard relief was appropriate.

1. Competition. Afriqom’s African fertiliser reporting services were sufficiently comparable with Argus’s services to be competitive. Competition did not depend on complete interchangeability. The relevant assessment was broad and objective, having regard to similarity of products, geographical and market overlap, likely customers, and the scope of the competing business.
2. Fidelity and preparation. Registering a company, discussing an idea and consulting lawyers may be legitimate preparation. Dr Halim went further by diverting Argus documents to his personal account, preparing competing reports and marketing material, permitting customer research for Afriqom, and promoting the competing business while still employed. Those activities impaired his ability to serve Argus faithfully and breached his duties.
3. Restrictive covenants. Argus had legitimate interests in confidential information and customer and business connections. The nine-month restrictions were limited to the relevant fertiliser business and geographical regions in which Dr Halim had been materially involved. The non-compete restriction was reasonably necessary because confidentiality, non-solicitation and non-dealing provisions would be difficult to police.
4. Confidentiality and privacy. Dr Halim misused Argus’s confidential information, including the African fertiliser report material and information sources. Argus’s access to his work inbox was permitted by the applicable policy and did not amount to a repudiatory breach. Even if a privacy right had been infringed, the breach would not have been sufficiently serious to discharge the post-termination restrictions.
5. Relief. Injunctions enforcing clauses 17.2, 17.3 and 17.4 were granted until 15 May 2019. A further permanent confidentiality injunction was refused because the proposed wording was imprecise and overbroad. Springboard relief was refused because Argus had not established the precise continuing advantage or the necessary scope and duration of such relief.