Wednesday 17 November 2010

City Team Moves

[Thanks to Dr John McMullen of Short Richardson & Forth LLP for preparing this case summary]

The High Court has handed down its decision in Lonmar Global Risks Limited v West and Others

Hickinbottom J considered a claim for breach of contract and fiduciary duty against a team of employees formerly employed by Global Risks and for inducement of breach of contract and conspiracy against Tyser, a direct competitor of Global Risks and the new employer of Global Risks team.

Each of the employees were alleged to have solicited clients and other employees away from Global Risks whilst still employed by it. But the case illustrates the rule that many cases are fact sensitive. There were some breaches of enforceable restrictive covenants but no loss could be proved. Nor were the employees liable for breach of contract or fiduciary duty in failing to inform the company of any alleged wrongdoing or to inform the company of an impending team departure.

Unless an employee is a fiduciary (such as a director or senior manager) there is no duty to report one's own misconduct or of fellow employees. A fiduciary duty did not arise from the relationship of employer and employee per se. Finally there was no evidence of inducement of breach of contract by the new employer nor of conspiracy between the new employer and the departing team.
[2010] EWHC 2878.

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