Summary and aim:
To protect our client’s business from a departing team.
A Lloyd’s and London market insurance broker.
Summary of the situation and the challenge:
The head of a department within our client resigned and was setting up his own broking firm in competition with our client. A few days later his team members (who reported into him) also resigned. While they did not say they were joining the head of department in his new firm it was anticipated that they would do so and the timing of their resignations appeared to be more than a coincidence. Our client was concerned that the team would solicit its clients and staff causing significant loss to their business. Despite there being confidentiality provisions and post termination restrictions in their employment contracts the team asserted that they were not bound by these provisions and so were free to compete immediately.
- We placed the employees on garden leave for the remainder of their notice periods and removed their access to our client’s computer systems.
- We obtained an interim High Court Injunction immediately to prevent the employees from soliciting our client’s clients in any organisation and from carrying out any work for the new firm pending a final hearing regarding the enforceability of the post termination restrictions and confidential information provisions contained in their employment contracts.
- We undertook an extensive investigation into the actions taken by the employees shortly prior to their resignations to enable us prove that their actions were in breach of their employment contracts.
- By preventing the employees from soliciting our client’s clients and stopping them from working for the new firm, our client was given the opportunity to secure its relationships with its clients without interference from the departing employees.
- Ultimately our client sold the book of business to the departing head of department at market value in exchange for settlement of the High Court action.
- The departing employees were unsuccessful in poaching any other members of staff from our client.