Team Moves And Use Of Springboard Relief

The recent High Court case of QBE Management Services (UK) Ltd v Dymoke and Others provides a useful reminder of the legal issues relevant to team moves. In particular it is significant due to the granting of a Springboard injunction as final relief. A Springboard injunction is an equitable remedy which effectively imposes a restraint of trade on a defendant in circumstances where there is no express restraint of trade provision, e.g. non-compete or non-solicitation/ dealing clause. The aim of the injunction is to prevent the defendant from benefiting from an unfair advantage obtained as a result of a breach of duty.

The facts of the case relate to three employees of QBE's marine insurance business who planned to set up a venture in direct competition with QBE and to move across QBE's underwriting and claims team, together with their books and clients and data. The court held that both during their employment and whilst on garden leave following their resignations from QBE, the employees had solicited QBE's employees, misused QBE's materials and confidential information, solicited QBE's marine broker customers and failed to disclose any of these activities to relevant members of QBE's management thereby also involving a breach of fiduciary duty. It also held that PRO, the new venture, played a full and active role in supporting these unlawful activities, both logistically and financially.

Despite the former employees denying any 'significant head start' and arguing there was no causation for any of the breaches, QBE was granted a Springboard injunction to prevent the former employees from gaining an unfair competitive advantage over QBE as a result of their unlawful activities. QBE was also awarded over £300,000 in compensation for loss and damage.

The non-compete covenants were however held to be unenforceable against the other employees who had left QBE and gone to work for the defendants, as QBE had "not...