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Northern Ireland
Caterpillar Logistics Services (UK) Ltd v de Crean [2012]
Published on: 24/02/2012
Issues Covered:
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Background This case involved an appeal against a refusal to grant an injunction that sought to prevent a former employee from misusing confidential information. The defendant employee had been the Logistics Centre Manager for the applicant and worked on a significant customer service agreement for an automotive parts firm who used the applicant for its distribution.The defendant applied, and was offered, a job with the customer. Following the defendant‟s resignation, the applicant initiated proceedings seeking to restrain breach of confidential information and trade secrets and also sought an order preventing the defendant from playing any part in the agreement.In the High Court the claim for an interim injunction was dismissed on the grounds that the defendant should not be oppressed by the litigation and that it was unlikely that the applicant would establish that the relationship between themselves and the defendant was one in which it would "be equitable to cast upon the defendant the burden of showing that [the defendant and her new employers] have taken effective measures to ensure that nodisclosure will occur. No court has ever made such a finding in a case of an employer against an employee." However, an application for permission to appeal was granted as in theory claimant could argue for Bolkiah relief.Based on the following reasoning, the appeal was dismissed:- “Nothing justified the extension of barring-out relief, as granted in Bolkiah, to the ordinary relationship of employer and employee as this was not a fiduciary relationship. The court only has the power to grant barring-out relief to an employer against an employee in the most exceptional circumstances.”Further, barring-out relief had not been the relief for which the claimant had contracted. It could have required the defendant to enter into an express covenant not to enter the employment of a customer or competitor. Any such covenant would have had to be limited in time and reasonable as between the parties and in the public interest. It had not sought such a covenant, instead it had obtained the defendant's agreement in respect of its confidential information. It had been no answer for the claimant to contend that it was not the practice for employers to contract for express covenants to prevent employees going to work for their customers. The claimant had been sufficiently concerned to protect its confidential information to require the defendant to enter into a confidentiality agreement and it had designed that agreement to provide it with appropriate protection.A requirement that the duration of a confidentiality agreement be of defined duration was not supported by authority. Agreements that restricted the misuse of an employer's trade secrets were commonly of indeterminate length and were enforceable The judge's decision to refuse to grant an interim injunction restraining the defendant from misusing confidential information would be upheld, but, on the ground that the claimant had not established any arguable case that the defendant had broken or intended to break, or even that there had been a real risk that she would break, the terms of the confidentiality agreement.http://bit.ly/xElXQ3

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 24/02/2012
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