Employee Injunctions: Recent Cases On Protecting Confidential Information

• Published date: 05 February 2021
• Subject Matter: Employment and HR, Contract of Employment
• Law Firm: Walker Morris
• Author: Ms Rebecca Jackson

For many employers, confidential information, customer connections and a pool of skilled employees are fundamental to the success of their business. In a post-Covid world, where employers need to capitalise on every asset and protect against avoidable threats more than ever before, this is a particularly 'hot topic. Applications for injunctions to protect confidential information are increasingly hitting the courts – a trend that is expected to continue.

Rebecca Jackson highlights some recent employee injunction cases and offers practical advice for employers.

Injunctions against [former] employees

During or following termination of their employment, employees or former employees often have the ability to take advantage of confidential information, strategic plans, customer/client details or other important information relating to their employer's business – often to benefit a rival business. It is therefore common for employers to include, in the contract of employment, various express contractual terms with a view to preventing employees from disclosing confidential information, competing, soliciting clients and poaching employees. Such provisions are often referred to as restrictive covenants or post-termination clauses.

In our In our , we provided an overview of the various actions that an employer can take in the event of a breach or suspected breach of confidentiality or restrictive covenant. One of the most significant and effective options is to seek an injunction via court proceedings – but what does that involve?

Fundamental principles – contemporary context

Two cases from the end of 2020 demonstrate the fundamental principles underpinning injunction applications of which employers should be aware – but in an up-to-the-minute context.

The claimant in Gemini Europe Ltd v Sawyer ¹ was part of a group of companies dealing in cryptocurrencies. It had engaged the defendant as its Managing Director. The employment contract included a non-compete clause preventing the defendant, for nine months post-termination, from holding a position in any business which was, or was about to be ², in competition with the claimant. After just a few months the defendant gave notice of his intention to leave to become the global manager of a company dealing in Bitstamp cryptocurrency. Following the defendant's notice period and termination of the employment, the claimant issued court proceedings for an injunction to enforce the non-compete clause, and gave a...