In the case of MPT Group Ltd v Peel and others  EWHC 1222 (Ch), the High Court was asked to decide whether employees were under a duty to disclose their intention to compete to their employer.
The facts of the case were that Mr Peel and Mr Birtwistle were employed by MPT Group Ltd (a company that produces and supplies machinery, parts and equipment to the mattress industry) in management positions. The employees resigned from their positions on the same date, Mr Peel giving the reason for his resignation as wanting to work from home and spend more time with his family, and Mr Birtwistle advising he had been offered a position doing ‘panel wiring’. They denied that they were leaving to form a partnership/start up their own business in competition with MPT.
Both Peel and Birtwistle were subject to extensive confidentiality clauses and restrictive covenants within their contracts of employment, to the extent that they were prohibited from soliciting or even dealing with customers with whom they had personal contact, for six months.
After the relevant period had expired however, Peel and Birtwistle incorporated MattressTek Ltd, a company that was in direct competition with MPT, and began selling complex mattress machines. It further transpired that prior to leaving MPT, both men had copied a large amount of company data which included client and supplier databases, price and discount lists, sales quotations and orders, machinery drawings and manuals, and other documentation crucial to MPT’s business.
MPT sought an injunction against the men based on the misuse of confidential information, breach of restrictive covenants, and also upon a breach of the duty to answer questions truthfully. In particular they sought an interim injunction prohibiting Peel, Birtwistle and MattressTek from soliciting, dealing or contracting with MPT’s customer and suppliers, and an unlimited injunction preventing them from disclosing or using MPT’s confidential information.