Poachers beware...

When faced with the threat of a large-scale team move, swift

action by the employer can help mitigate any potential damage.

In UBS Wealth Management (UK) Limited & another v

Vestra Wealth LLP & Others (2008) EWHC1974 (QB), the

High Court granted a springboard injunction against Vestra

following the poaching of large numbers of staff from UBS.

Where employees have used former employers' information or

positions to their own advantage, and by doing so gained a head

start or "springboard", the court may grant a special

type of injunction to prevent them from taking unfair advantage of

the springboard they have obtained.

The springboard injunction has traditionally been used in cases

where an unfair advantage or head start was gained through misuse

of confidential information (Balston Limited v Headline

Filters (1987) FSR330), or where an unfair advantage was

gained by inducing an employee director to breach his contractual

and fiduciary duties (Midas IT Services Limited v Opus

Portfolios Limited (unreported, 21 December 1999, CHD)).

The UBS case clearly confirms the principle that springboard

injunctions are not confined to cases of abuse of confidential

information, but can be applied to any breaches of contract by the

defecting employees.

The decision shows the courts' readiness to apply the brakes

to the otherwise lawful activities of a defendant whose earlier

wrongdoing has given them a competitive head start. It also serves

as a good illustration of some of the legal pitfalls of organising

a large scale team move. In this case, the evidence suggested that

Vestra had obtained an unfair head start by inducing UBS staff to

breach their employment contracts and so the Court prohibited (for

the time being) Vestra from approaching or doing business with

UBS' clients ? something which it would otherwise

have been free to do.

Facts

Briefly, the facts of this case were that UBS Wealth Management

(UK) Limited ("UBS") operated a wealth management

business and had employed Mr Scott (one of the defendants in the

case) in a senior position following the acquisition of two

stockbroking firms, one of which he had worked for previously.

However, he resigned from his employment at UBS in May 2007 and, in

exit negotiations, agreed that any restrictive covenants barring

him from competing with UBS or soliciting its clients or staff

would only bind him until 1 September 2007.

Mr Scott founded a new business, Vestra Wealth LLP

("Vestra"). He persuaded a large...