Dorma UK Ltd v Chris Bateman and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Spencer |
| Judgment Date | 09 October 2015 |
| Neutral Citation | [2015] EWHC 4142 (QB) |
| Docket Number | Case No: HQ15X04055 |
| Court | Queen's Bench Division |
| Date | 09 October 2015 |
2015 EWHC 4142 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Spencer
Case No: HQ15X04055
Mr Adam Solomon and Ms Charlotte Davies (instructed by Hill Dickinson) appeared on behalf of the Claimant
Mr Simon Devonshire QC (instructed by Eversheds) appeared on behalf of the Defendants
(As Approved)
As pleaded, this is an application by the claimant ("Dorma") for a springboard injunction against the first four defendants to restrain them from working for or with the fifth defendant ("Arrow") or anyone else in the business of commercial and industrial doors in the UK market, from soliciting specified customers, from poaching and employing specified employees and from competing with the claimant in relation to specified businesses. The claimant also seeks injunctions against all five defendants for the return and protection of the claimants' confidential information, including the provision of affidavit evidence in relation to the misuse of such information.
The claimant seeks an injunction against the first defendant to prevent breaches of his restrictive covenants and an injunction to prevent the fifth defendant, Arrow, from inducing the first four defendants to breach any orders made against any of them.
The application notice for this interim relief was issued on 28 September 2015 with a time estimate of one hour. This proved to be grossly inadequate. The application was listed before me on Wednesday 7 October with a revised time estimate of half a day. In the event it lasted a full day. I have had the benefit of skeleton arguments and full oral argument from Mr Adam Solomon and Ms Charlotte Davies on behalf of the claimant and from Mr Simon Devonshire QC on behalf of all five defendants. I am grateful to all counsel for the clarity of their submissions.
Because of the urgency of the matter, I indicated that I would give this extempore judgment today, Friday 9 October.
It is important at the outset to explain that the parties have agreed on directions for a speedy trial to be heard in December 2015 and this application must be viewed against that background. This is not the occasion for a minute analysis of all the evidence and arguments. I shall therefore concentrate in this judgment on the main issues. However, I make it clear that, although I will not necessarily refer to each and every argument that has been advanced, I have taken into account and considered all the submissions that have been made.
The evidence before me on behalf of the claimant is a witness statement from Dorma's regional director for the United Kingdom and Ireland, Mr Craig Gilmour, dated 28 September, producing many documentary exhibits. On 6 October, the day before the hearing, witness statements from all five defendants were served. The statement on behalf of the fifth defendant, Arrow, was made by its managing director Mr Oliver.
Factual background
In short summary, the factual background is as follows. Dorma's business is the manufacture, repair, maintenance and installation of automatic commercial and industrial doors for the UK market. The company has a branch in Bridgwater, Somerset, which covers the south west region. In October 2013, Dorma had taken over a company called Ascot Doors Ltd, including the team at Bridgwater. The first defendant had been the regional service manager. He became Dorma's branch manager.
In January 2015, his terms of employment were enhanced. He received a substantial pay increase. His terms and conditions were also revised to include various restrictive covenants, including, to adopt the shorthand used during the hearing, a six month non-compete clause and nine month non-solicit, non-poach and non-deal clauses. I shall describe those clauses more fully later in this judgment. As branch manager in Bridgwater, the first defendant had overall responsibility for all aspects of the branch's performance, including managing the team.
The second defendant was employed as a service surveyor responsible for generating sales through marketing and business development. The third and fourth defendants were both employed as service coordinators, responsible for handling customer calls to the branch and co-ordinating visits by engineers to customers.
It seems that in late 2014 or early 2015 the first defendant approached the fifth defendant, Arrow, with a view to a possible change of employment. Arrow is a national company whose business is generically similar to the claimant's, that is to say the manufacturer and supply of commercial doors. The precise extent to which Dorma and Arrow are in direct competition for the same business is less clear and may be one of the issues for the trial. There is a suggestion that each caters for different niches within the market.
Arrow was already a well-established company but its branch in Bridgwater, only two miles from the claimant's branch, did not open for business until the beginning of September 2015.
The claimant's case is that the first defendant, in breach of the restrictions in his contract and in breach of his fiduciary duties to the claimant, effectively engineered an unlawful "team move", by which he and the other three defendants all resigned from their employment with the claimant and took up employment instead with Arrow. It is common ground that they handed in their resignations on the same date, 3 August 2015. On the claimant's case, at the time they tendered their resignations, the defendants were evasive and untruthful with the claimant's regional director, Mr Gilmour, not revealing that they were going to work for Arrow, a competitor. The first defendant, for example, when asked the direct question, lied in denying that he was going to work for Arrow.
On 5 August, the first defendant was placed on garden leave. He was reminded of his post termination restrictive covenants. The second, third and fourth defendants were subsequently placed on garden leave on or around 14 August.
At the start of his garden leave, the first defendant returned his company mobile phone and company laptop. All information on the devices had been wiped. He was not asked to do this by his employers. The claimant suggests that he must have been covering his tracks. The first defendant, in his witness statement, denies this. He does not remember wiping emails from his laptop or phone and, if he did, he says it would only have been in order to clear a few private emails which would have taken a long time to weed out individually; he did this as a matter of politeness and etiquette when returning the company's property.
Before starting her garden leave, but after giving notice, the third defendant, Chloe Power, contacted Mr Gilmour on 10 August asking for a printed version of all service clients. The request was refused. It was not the first such request. On 11 June, she had contacted the claimant's head office, asking for lists of all the company's five star clients, ie those who pay an annual service fee. There would have been 800 or so clients and the information would have run to hundreds of pages. That request had been declined as well.
The claimant's case is that these requests must have been made so that the third defendant could take and misuse confidential information in the form of customer lists. During her notice period, before she went on garden leave, it is said that she and the fourth defendant, Holly Morton, were seen carrying out a high volume of photocopy. In her witness statement, the third defendant, Chloe Power, denies that there was anything sinister in her request for customer lists. The June request was so that she could have a list on paper, which she found easier to work with, and although this request came a few days after she had been offered an interview with the fifth defendant, there was no intention of misusing the information. She says that the request on 10 August was for much the same reason. She was trying to get on top of the outstanding paperwork before she left the company. She found it difficult to work with the information on the screen. She had previously raised a problem with the service director but nothing had been done about it. There was inadequate information about when the last service had been completed for each customer. She said she had also raised it with Mr Gilmour. She and the fourth defendant had obtained this list and were working on it for the benefit of those who would take over their role when they left. She had explained this, she said, in an email to Mr Gilmour on 10 August.
On 13 August, the fourth defendant, Holly Morton, approached the claimant's north west branch coordinator requesting that she be sent the reports showing all the contracts for the Bridgwater branch. This time the reports were sent. They included hundreds of customer names, contract start and end dates and the like. The claimant's case is that this was another attempt, now successful, to obtain confidential information for improper use in their new employment.
In her witness statement, the fourth defendant denies this. She explains at length the problems there were with the new computer system, exacerbated by the introduction of a call centre at Hitchin rather than personal contact with customers. She points that, when the covering email was sent, it is stated that Ricky Heere, the business process manager, had requested the same...
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