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Software company granted injunction against former employee

Posted: 22nd June 2016   In: Business Employment

A software company has been granted an interim injunction preventing a former employee from working for a larger rival.

The company was a relatively small enterprise but had a market-leading service in its sector. It had employed a sales executive on an employment contract that included a restrictive covenant. This stated that if he resigned, he could not join a rival company doing similar work for a period of 12 months. There was also a restriction covering various geographical areas.

In spite of this, the executive started doing informal work for a rival business. He then resigned so he could work for the rival full time. Before leaving, he sent attachments from his company email address to his personal email address.

The company sought an injunction to enforce the restrictive covenant.

It submitted that it had substantial interests to protect including confidential information such as its methodology, pricing strategy, and sales techniques. The rival business submitted that the executive had held a relatively minor role with the software company and there was nothing confidential in the information he had downloaded.

The court held that there were some serious issues to be tried. The executive’s role did not appear to be as minor as the rival suggested. The covenant also made it clear that he was not allowed to work for a competitor in the same area of business. The restriction was wide and drastic but it was not plainly obvious that it was excessive.

The software company should therefore be granted an injunction to protect its interests until a full hearing could be heard.

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

Posted by: Sarah Liddiard
Corporate Commercial
Luton Office