Springboard injunctions are often granted in circumstances in which senior or key sales employees leave to work for a competitor. The name derives from the case of Bullivant v Ellis (1987) in which Mr Justice Falconer stated that the purpose of the injunction was “to prevent the defendants from taking unfair advantage of the springboard which…they must have built up by their misuse of the information in the card index”.
Most such injunctions are sought with a view to preventing misuse of confidential information (such as customer connections and contacts), serious breaches of contract or other unlawful conduct. Unsurprisingly, in the vast majority of cases the application for an injunction will be based on alleged breaches of post-termination covenants, such as those which are stipulated by non-compete and similar clauses.
However, there are limited instances in which an injunction may be obtained, even in the event that there are no such contractual provisions. In Willis v Jardine Lloyd Thompson, in a refreshingly brief judgment, the Court of Appeal disagreed with the decision of His Honour Judge Seymour to refuse to grant an interim injunction. He took the view that there was no point in granting an injunction because, in effect, the horse had bolted with the defection of a large number of employees to a competitor.
Willis is a major international insurance broker. It has a highly respected Fine Art, Jewellery and Specie Gifts Division and is the world leader in this sector with sales amounting to tens of millions of dollars each year. In a witness statement made by Willis’ CEO of Market Services, David Thomas, on 13 April 2015 he stated that some 30 employees from the department had left in the last 10 days. 22 left on Maundy Thursday, four left on 9 April, three on 10 April and two on the 13th. Those leaving included almost all the senior management team and key sales staff. Some 30 more junior staff were left. It turned out that they had all left to join a direct competitor, Jardine Lloyd Thompson (JLT). Mr Thomas thought that there would be a second wave of resignations and that this was as part of a coordinated attack. It was suspected that the underlying strategy was to weaken the department by the mass defections, thereby enabling JLT to acquire the whole department at a discounted price.
The emergency protection claimed in the application for an injunction was, in effect, to stop the plot from being carried out any further. The request was for a springboard injunction because it was alleged that JLT had benefited from their unlawful activities (using confidential information to entice away employees) and that it was necessary, in order to avoid them taking further advantage, to stop any further employees, from the UK or the US, from being able to join them.
The High Court Judge was satisfied that Mr Gordon, the first employee to leave, had broken his general contractual duties of loyalty and good faith (although Mr Gordon continued to deny this). However, the judge questioned whether there was any point in an injunction. He noted that the evidence was that the existing defections in the UK had, in effect, torn the heart out of the business.. He took the view that any restrictions would be unlikely to apply to US employees. As a result he refused the injunction.
Willis appealed to the Court of Appeal, maintaining that it was wrong that the remaining employees would not be of interest to JLT and that, in effect, everything was in the past. There remained a need to prevent further poaching of staff. There was also a remaining risk that there could be serious poaching of US staff, referred to as phase two of the plan. Further, there would be very little harm to JLT if the injunction was granted. It would not stop them from trading lawfully. On the other hand Willis had been badly destabilised by the defections and needed urgent protection. Lord Justice Elias agreed. The High Court Judge had failed to consider the balance of convenience. Further, although the damage suffered by Willis was as a result of events in the past, that damage was continuing and protection was therefore appropriate, essentially to stop it from getting any worse.