Petter v EMC Europe Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cooke |
| Judgment Date | 22 May 2015 |
| Neutral Citation | [2015] EWHC 1498 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: TLQ/15/0345 |
| Date | 22 May 2015 |
[2015] EWHC 1498 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Cooke
Case No: TLQ/15/0345
P. Goulding QC and A. Scott (instructed by Allen & Overy) for the claimant
S. Bloch QC, S. NeamanandMiss K. Apps (instructed by DAC Beachcroft) for the second defendant
Hearing dates: 14th and 15th May 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Justice Cooke Mr Justice Cooke The applications
There are two applications before the Court: (i) the Second Defendant (EMC Corporation) applies to challenge the Court's jurisdiction over the claimant's (Mr Petter's) claim against it (the Part 11 Application); and (ii) Mr Petter applies for an interim anti-suit injunction against EMC Corporation restraining, pending determination of Mr Petter's claim, further prosecution of its proceedings against him in Massachusetts (the Massachusetts Proceedings) (the Anti-Suit Application).
Background
EMC Corporation is a publically traded Massachusetts corporation with headquarters in Hopkinton, Massachusetts. Its business is that of information storage, management and protection. It has numerous direct and indirect subsidiaries globally. EMC Europe Limited (EMC Europe) is one such indirect UK subsidiary. At all material times Mr Petter was employed by EMC Europe in a senior role within the Europe, Middle East and Africa (EMEA) region, most recently within the UK and Ireland. From 2009, his role was Director, Global Accounts, EMEA and then from 2011, he was promoted to Vice President and Country Manager, UK & Ireland. Mr Petter was subsequently promoted again to Senior Vice President and Country Manager, UK & Ireland on 14th April 2014. EMC Europe's business is to provide centralised sales and service support and general and administrative support for various other indirect subsidiaries of EMC Corporation that trade in EMEA. EMC Europe did not provide any such services for EMC Corporation. As Senior Vice President and Country Manager, Mr Petter's job was as managing director of all business in the UK and Ireland.
Pure Storage Inc (Pure) is a California-based competitor of EMC Corporation, with a UK subsidiary, Pure Storage Ltd (Pure Storage). Pure has (EMC Corporation claims) been targeting employees of EMC Corporation and its subsidiaries, lawfully or unlawfully to "poach" them, and – unlawfully – to obtain confidential information and trade secrets.
At some point in 2014 Pure approached Mr Petter, and Mr Petter was actively in discussion with Pure from November 2014 at the latest.
It appears that Mr Petter was orally offered a position at Pure Storage on 9th January 2015 and accepted a written offer on 12th January, following which he resigned from EMC Europe on 15th January. Thereafter he was on garden leave until his termination notice expired on 14th February 2015. He commenced employment at Pure Storage on 16th February.
The issues which arise in the present applications relate to the ambit of section 5 of Chapter II to the Brussels I (Recast) Regulation (1215/2012) which sets out provisions for "jurisdiction over individual contracts of employment". Article 20 provides that "in matters relating to individual contracts of employment, jurisdiction shall be determined by this Section" whilst Article 21 provides as follows:
"1. An employer domiciled in a Member State may be sued:
(a) in the courts of the Member State in which he is domiciled; or
(b) in another Member State:
(i) in the courts for the place where or from where the employee habitually carries out his work or in the courts for the last place where he did so …
2. An employer not domiciled in a Member State may be sued in a court of a Member State in accordance with point 9(b) of paragraph 1."
Article 22 provides that "An employer may bring proceedings only in the courts of the Member State in which the employee is domiciled."
Recitals 15, 18 and 19 of the Recast Regulation read as follows:
"15. The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction.
…
18. In relation to insurance, consumer and employment contracts, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules.
19. The autonomy of the parties to a contract other than an insurance, consumer or employment contract where only limited autonomy to determine the courts having jurisdiction is allowed, should be respected subject to the exclusive grounds of jurisdiction laid down in this Regulation."
Put shortly, the essential issue between the parties is whether or not EMC Corporation, the Massachusetts company which is not domiciled in a Member State is to be considered "an employer" of Mr Petter and whether his contract with EMC Corporation relating to the grant of Restricted Stock Units (RSUs) is to be considered a contract of employment or part of a contract of employment for the purposes of Section 5. The RSU Agreements (of which there are 11) incorporate the Stock Plan issued by EMC Corporation which contains, at clause 13, a jurisdiction and governing law clause providing for submission to the exclusive jurisdiction and venue of the federal or state courts of The Commonwealth of Massachusetts and for the Plan to be governed by its laws. Mr Petter contends that this provision is of no effect as a matter of English law because of the terms of section 5 of the Recast Regulation, and that its terms entitle him to sue EMC Corporation here and require it to sue him here too, rather than in Massachusetts.
The contracts
In 2004 Mr Petter entered into an employment contract with EMC Computer Systems (U.K.) Limited (EMC UK) to work as a district sales manager within the UK. Subsequently, in November 2008, Mr Petter entered into a new employment contract with EMC Europe for a new position with responsibilities across the EMEA region (this being the contract that subsisted until its termination in February 2015 upon the expiry of Mr Petter's notice period following his resignation the previous month).
The letter of engagement dated 12th November 2008 confirmed Mr Petter's appointment as Director, Global Accounts — EMEA and referred to the "Main Statement of Terms and Conditions of Employment" with further details contained in the Employee Handbook. Included in the Main Terms and Conditions were the various provisions which applied following termination or employment. These included clauses 13–18 providing for the return of company materials, a restriction on competition, a restriction on recruiting company employees and other provisions relating to confidentiality and intellectual property. It has been accepted, as between Mr Petter and EMC Europe that the post-termination restrictions in clauses 14 and 15 are unenforceable as a matter of English law, as being in unreasonable restraint of trade. It is accepted by EMC Europe that Mr Petter has not breached clause 14 by working for Pure.
"14. LIMITED NON-COMPETITION
… During your employment with the Company and for the twelve month period following the effective date of your termination of resignation from the Company, you agree not to directly or indirectly develop, produce, market, solicit or sell products or services competitive with products or services being offered by the Company. (You shall not be considered in competition unless you have an ownership interest amounting to at least 1% in the enterprise, whether direct or indirect by way of opinion or otherwise, or an officership, directorship or other policy making executive position with the competing enterprise).
15. RECRUITING COMPANY EMPLOYEES
For the twelve month period following the effective date of your termination for any reason or resignation from the Company, you agree not to directly or indirectly, recruit, solicit, induce or attempt to induce any employees of the Company to terminate, alter or modify their employment relationship with the Company."
The Employee Handbook, to which the letter of engagement referred, stated that it was applicable "to all Employees of EMC Computer Systems (UK) Ltd and all UK based employees of all Associated Companies as listed in Addendum A." Addendum A referred to two companies only, EMC Europe and RSA Security UK Ltd. The handbook was therefore specifically referable to the UK employees of three particular subsidiary companies of EMC Corporation. At paragraph 10.15 of the handbook appeared a heading "EMC's Key Employee Agreement". There the following wording appeared:
"10.15 EMC'S KEY EMPLOYEE AGREEMENT
A. In view of the highly competitive nature of the business of EMC Corporation (together with its subsidiaries, the "Company"), the need of the Company to maintain its competitive position through the protection of its goodwill, trade secrets and confidential and proprietary information, and in consideration for being provided with access to certain trade secrets and/or confidential and proprietary information in conjunction with employment with the Company, every Employee accepts that it is necessary:-
1. Non-Competition. For as long as you are employed by the Company, to devote your full time and efforts to...
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