Gary Oliver
Senior Clerk
+44 (0) 207 822 7325
Mr Petter issued proceedings in the High Court seeking a declaration that the 12-month post-termination restrictive covenants in his contract of employment were unenforceable.
He issued an application notice seeking a speedy trial shortly thereafter. Mitting J ordered a speedy trial of the claim and his former employer appealed against that order. The Court of Appeal considered the principles to be applied in exercising the discretion to order a speedy trial, held that the judge had exercised his discretion lawfully and dismissed the employer’s appeal against the speedy trial order.
Orders for expedited (or “speedy”) trials in employee competition cases are frequently made when there is a dispute as to the enforceability of a restrictive covenant on the basis that the enforceability of the same needs urgent determination by the Court. The former employee (or, in the case of an alleged team move, the former employees) is usually subject to an interim injunction or has given undertakings to abide by the covenants until the determination of their enforceability at trial.
The longer the former employee has to wait until such trial, the further into the period of the post-termination restrictive covenants he will be and the greater the extent of unfairness and disruption he will face by being kept out of the market in the interim if the covenants are ultimately held to have been unenforceable.
The covenants in issue in the present case were a 12-month non-compete clause and a 12-month non-solicit employees clause. Mr Petter had told his former employer that he would honour the non-solicit clause though it was unenforceable. He and his former employer disagreed about the enforceability of the non-compete clause and he started work with a competitor called Pure Storage UK Limited (“Pure”) two days after the termination of his employment with EMC Europe Ltd (“EMC Europe”).
What was unusual about the circumstances of the speedy trial order in this case was that Mr Petter was not subject to any interim injunction.
EMC Europe contended that cases in which an interim injunction had been obtained to enforce a restrictive covenant fell within the special category apt for expedition and cases in which an interim injunction had not been obtained fell outside the special category and are not.
Vos LJ held that the correct principles in considering an application for a speedy trial were:
Vos LJ held that
The Court of Appeal has thus made clear that an interim injunction enforcing posttermination restrictive covenants is not a necessary prerequisite for a speedy trial order in a claim for a declaration as to the enforceability of the covenants.
The full judgment can be read here.
Paul Goulding QC, instructed by Allen & Overy LLP, acted for Mr Petter.
Gary Oliver
Senior Clerk
+44 (0) 207 822 7325
Derek Sutton
Deputy Senior Clerk
+44 (0) 207 822 7327
Adam Sloane
Deputy Senior Clerk
+44 (0) 207 822 7326
Dean Tolman
Clerk
+44 (0) 207 822 7331
Billy Brian
Clerk
+44 (0) 207 822 7339
Marc Armstrong
Clerk
+44 (0) 207 822 7330
Adam Fuschillo
Clerk
+44 (0) 207 822 7329
Danny Compton
Clerk
+44 (0) 207 822 7338
Sophie Reeve
Clerk
+44 (0) 207 822 7324
Rio Sully
Clerk
+44 (0) 207 822 7299