Company granted injunction to stop ex-employee contacting its clients

A company in a highly competitive market has been granted an injunction to prevent a former employee from contacting and dealing with its clients.

The case involved Delivery Group Ltd and former employee Mr Yeo.

In early 2020, the group had increased Yeo's notice period to six months and he entered into a restrictive covenant deed containing post-termination restrictions such as a prohibition on misusing any confidential information and a 12-month restriction on soliciting or dealing with any restricted customers.

The company traded as a 'Postal Hub' and specialised in helping commercial organisations with large mailing lists to access wholesale costs for mail delivery.

A rival company was launching a new service, trading as 'Posthub', which mimicked the Delivery Group’s full management service business model. It had recruited Yeo and several of the group’s senior heads of department.

Yeo was put on garden leave until his employment terminated in March 2021, when he started as Posthub's Head of Client Services.

The group argued that since the termination of Yeo's employment he had committed several breaches of the post-termination agreement.

The High Court granted its application for an injunction to enforce the restrictions.

The court held that the group had legitimate business interests to protect by way of confidential information to which Yeo had access.

The non-dealing clause was justified by the confidential information that Yeo arguably possessed, and his client contacts in a specialised marketplace. Twelve months was not too lengthy. Competition was fierce, prices were revised annually and 12-month covenants were commonplace.

Please contact us if you would like more information about the issues raised in this article or any aspect of employment law.

to chat