Company Acts to Prevent Former Employees Taking Its Business

June 30, 2016

Company Acts to Prevent Former Employees Taking Its Business

If you suspect a current or former employee of disloyalty, the law can move extremely quickly to help you. In one case (M&E Global (Staffing) Solutions Limited and Another v Tudge and Others), a company won a High Court injunction within days of forming a belief that it was the target of a plot by two of its former managers to strip it of 40 per cent of its business.

M&E Global (Staffing) Solutions Limited derived that proportion of its turnover from providing skilled workers to defence installations in Europe. It became suspicious and began an inquiry after it learnt that misinformation was being spread to those workers that it was 'finished' and under investigation for fraud.

The company pointed the finger at two former employees who had worked closely together and were friends. It suspected that they were intent on establishing their own business, luring away its workers and taking over one of its most important contracts in Germany.

One of the men was still working for the company when he was alleged to have sent a string of emails to his friend, who had already left, which contained confidential details of business opportunities, tax arrangements and pay structures which would be of great use to a competitor.

It was said that the man was engaged in updating his CV at the same time as sending those emails and was clearly intent on leaving. He remained subject to a restrictive covenant, which required him not to engage in competing activities for six months after his departure.

Following an emergency application, the Court found that the company had raised a serious issue to be tried and that injunctive relief was justified. Amongst other things, the pre-trial order required the two men to hand over any confidential information belonging to the company that was in their possession. They were also forbidden to make contact with any of the company's workers with a view to engaging them.

The Court directed a speedy trial of the action.