Judgment handed down in QBE

06.02.2012

In an all-Littleton affair QBE succeeded in obtaining, after an expedited trial, ”springboard” relief to restrain three former employees and their financial backer from commencing a competing business. The case is believed to be the first example of springboard relief being granted as final relief  on the basis of breach of fiduciary duty and breaches of an employee’s duty of fidelity.

The relief granted went beyond the post termination restraints within the contracts of employment of the departing employees. Indeed the Judge found the employee’s non competition covenants not to enforceable. In addition to injunctive relief QBE additionally recovered damages and indemnity costs.

Mr Justice Haddon-Cave  found that  two employees, one of whom owed fiduciary duties, had solicited a third and planned  a competing business which would rip the heart of out of part of QBE’s marine insurance business.  Confidential information was used in order to garner financial support for an external backer. The eventual plan involved the use of an external recruitment agent which the Learned Judge found to have been a sham to conceal the solicitation of fellow employees.

Mr Justice Haddon-Cave undertook an extensive review of the case law on “team moves” in particular on the duty to self report  or to report the misconduct of others. He additionally considers the extent of the relief that may be granted to neutralise a springboard advantage.

David Reade Q.C. and Dale Martin acted for QBE. Selwyn Bloch Q.C., Damian Brown and Craig Rajgopaul acted for the Defendants.