Egon Zehnder Ltd v Mary Caroline Tillman
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mann |
| Judgment Date | 23 May 2017 |
| Neutral Citation | [2017] EWHC 1278 (Ch) |
| Docket Number | Case No: HC-2017-001053 |
| Court | Chancery Division |
| Date | 23 May 2017 |
[2017] EWHC 1278 (Ch)
Mr Justice Mann
Case No: HC-2017-001053
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London, EC4A 1NL
Mr James Laddie QC (instructed by RPC LLP) for the Claimant
Mr Daniel Oudkerk QC and Ms Amy Rogers (instructed by Simmons & Simmons LLP) for the Defendant
Hearing dates: 15 th & 16 th May 2017
Introduction
This is an application for an injunction to enforce an employee restrictive covenant which, if effective, would restrain the defendant from working for a competitor of the claimant for a period of six months from the termination of her employment. Her employment came to an end on 30 January 2017, and the covenant therefore expires on 30th of July 2017. The defendant informed the claimant that she intended to start working for a new employer on 1 st May 2017. Proceedings were issued on 10 April 2017 and an application notice seeking an injunction was issued on the same date. The agreed procedure and exchanges of evidence brought this matter to a hearing for one day on 15th May. In fact it took a little over one day to hear, and even that required a significant degree of economy of presentation. The defendant has not yet started working for the competitor in her intended role (though she has just been offered an alternative temporary role), and is awaiting the outcome of this application. If the application were not disposed of swiftly than the bulk of the period of her restriction would have expired anyway. Accordingly, the matter had to be dealt with quickly.
That situation has given rise to 3 principal effects so far as the conduct of the application is concerned. First, the evidence has been, to a degree, hurried. A significant part of the evidence in reply came in only two working days before the application was heard. A significant part of that evidence amounted to new historical material, apparently just discovered by the claimant, which would probably have been more accurately described as new evidence in chief. The defendant would not have had a chance to deal with that new evidence in detail without an adjournment which, for understandable reasons, she said she did not want. Accordingly I have had to approach that evidence with some care and not simply treat it as clear and unrebutted evidence against the defendant (so far as it operates against the defendant). Second, in order to fit submissions within the timeframe of the hearing time available the parties have had to be even more economical in their submissions than they might otherwise have been, particularly bearing in mind the fact that it is common ground that I should have regard to the merits of each side's case notwithstanding that this is only an application for an interim injunction (see below). One day was probably a rather ambitious target for that process, and I allowed the parties to go into a second day. Submissions were still, perforce, limited and economical. I should record that both Mr Laddie QC for the claimant and Mr Oudkerk QC for the defendant made their submissions with commendable clarity and economy, both of them recognising the need to conduct the case swiftly, notwithstanding the weight of the material and the significance of the matter to the parties. Third, the timescale means that it was necessary to prepare and deliver this judgment swiftly, so that the parties knew where they stood, and that means that this judgment probably omits some of the elaboration which might otherwise have been present had such haste not been required.
The approach to this application
It is agreed between the parties that this is one of those cases in which the court has to go beyond American Cyanamid principles, notwithstanding the fact that the application is an interim application, and consider the merits of each side's case. It is a case like Lansing Linde Ltd v Kerr [1991] 1 WLR 251 in which Staughton LJ said:
"If it will not be possible to hold a trial before the period for which the plaintiff claims to be entitled to an injunction has expired, or substantially expired, it seems to me that justice requires some consideration as to whether the plaintiff would be likely to succeed at a trial. In those circumstances it is not enough to decide merely that there is a serious issue to be tried. The assertion of such an issue should not operate as a lettre de cachet, by which the defendant is prevented from doing that which, as it later turns out, he has a perfect right to do, for the whole or substantially the whole of the period in question. On a wider view of the balance of convenience it may still be right to impose such a restraint, but not unless there has been some assessment of the plaintiff's prospects of success. I would emphasise "some assessment", because the courts constantly seek to discourage prolonged interlocutory battles on affidavit evidence. I do not doubt that Lord Diplock, in enunciating the American Cyanamid doctrine, had in mind what its effect would be in that respect. Where an assessment of the prospects of success is required, it is for the judge to control its extent." (Page 258A-D)
The argument before me basically went almost exclusively to the respective merits of the parties' cases with little or no reference to normal American Cyanamid principles. The parties were implicitly, if not explicitly, inviting me to decide this case primarily by reference to the merits rather than the balance of convenience (though there was some limited reference to discretion). I have therefore approached this application on the basis of assessing the merits on the evidence as it stands (bearing in mind the evidential considerations referred to above and the fact that certain disputes of fact cannot be resolved on this application).
Facts
The claimant is the UK subsidiary company of a worldwide group ("the EZ group") whose holding company is Swiss. It offers what it describes as "professional services" with a particular focus on executive search and advisory services for its clients. Those services involve identifying the needs of employer clients in terms of its senior executives and then going out and trying to identify and bring home candidates. It would seem to be a very specialised function. The candidates tend to be high level candidates, often from major organisations. An engagement can take months to fulfil – on the claimant's case it can take an average of six months, though many take less time than that. Furthermore, the business does not merely involve a series of discrete assignments. The group companies get closer to the business of the clients than that, becoming what is described in the evidence as a "trusted advisor" and developing an understanding of the client's business and senior employment needs. In addition to executive search functions the group carried out "mapping" (a mapping exercise to assess the talent in the market, requested by a client), non-executive search, management appraisal and development and board effectiveness reviews.
The group operates in many jurisdictions, in each country via a locally incorporated company. The claimant is, as already indicated, the UK company which fulfils the group's functions in the UK. All UK-based employees are employed by the claimant. However, notwithstanding that structure, there is a very considerable cross-group engagement between the various entities, with large-scale cooperation in fulfilling assignments and in strategic planning across the various business areas of the group. This is not surprising when the best candidate for, say, a UK post may be someone in the US or Europe. A worldwide approach is often taken to business planning. The claimant herself is an example of UK employees who nonetheless operated outside the UK and in the sphere of other non-UK group companies.
The group has nine practice areas of which financial services is one (and the relevant one for the purposes of this application). The others are (and were) consumer, industrial, health, services (eg transport, logistics, travel), technology and communications, public and social enterprise and private equity. Within the Financial Services Practice Group (whose function is what it sounds like) practitioners may be members of Global Practice Groups, core global group members, members of regional practice groups, core regional group members and local group members. Quite what the remit of each of those groupings are was not made clear in the evidence, but that does not matter. It is sufficient to note the worldwide nature of operations suggested by the names. The financial services area is very important for the claimant group – it currently generates 22.5% of global revenue billings; at the time the defendant was recruited it accounted for 17.6% of global billings. The services are offered worldwide and the various participating companies in the group service the world's largest financial institutions, including 13 of the world's 20 largest investment banks.
There are a large number of operating companies, each incorporated in the jurisdiction in which it operates. Each such locally incorporated company employs the individuals who operate in that jurisdiction. So far as the Financial Services Practice Group is concerned, wider management, control and planning is done via sub-group leaders (one for each "segment" of business within the group) and a Global Leader of the Group (a position which the defendant attained before she left).
Those engaged by the claimant are not recruited from those already working in similar companies doing similar work. They recruit from those who are in the field for whom they are to find candidates. Thus the defendant had already had a distinguished career in...
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