Constable: Strong argument that resignation was accepted
The High Court has refused to grant a law firm an injunction to prevent a departing solicitor from trying to entice any of its clients away for two years.
Mr Justice Constable said the evidence did not justify an interim injunction on stricter terms than the restrictive covenants that were already in Kate Jones’s employment contract.
The solicitor also had a strong chance of establishing at trial that her resignation from Hine Solicitors Ltd (HSL) had been accepted.
Ms Jones rejoined the family team in the Oxford office of 14-office HSL in 2015, having qualified there in 2007 and left in 2012. She was promoted to associate director last year and a new contract required that she could not give notice for three years.
Nonetheless, earlier this year she gave three months’ notice – the period she could give after the three years – and on 5 May joined Blaser Mills in Marlow.
HSL argued that her employment contract remained in existence, as it had not accepted the alleged act of repudiatory breach, and sought an order preventing Ms Jones from enticing away or attempting to entice away any client of HSL until 8 May 2025.
The firm said this was needed to prevent breach of the common law implied duty of fidelity on the part of the employee.
In considering that there were serious issues to be tried so that an interim injunction was justified, Constable J held that one was whether the clause requiring Ms Jones to work for HSL for three years was valid and effective, and another was whether HSL had in fact accepted her resignation.
Ms Jones’s counsel argued that HSL conducted itself consistently with having accepted her notice – including holding a leaving dinner for her – only to dispute the fact of her resignation on her penultimate day at work.
Constable J said Ms Jones’s case on this point was “on its face, a powerful one”, but not so overwhelming as to justify deciding the point summarily against HSL.
The solicitor maintained too that, even if the employment contract remained in place because her resignation was not accepted, there was no evidence of unlawful competitive activity. Further, there was a restrictive covenant in her employment contract anyway.
The evidence of ‘enticement’ on the part of Ms Jones “is close to non-existent”, Constable J observed.
“True it is that following her departure, there is no dispute that two clients of HSL took their work to [Blaser Mills]. That was at the start of May, and there is no evidence of any others since, and there is no evidence of any nefarious or improper steps taken by Ms Jones either before or after her departure from HSL in order to ‘entice’ the clients.
“It is perfectly natural that a client may wish to move, and the move itself (the only evidence relied upon, in effect) is simply insufficient to establish even a ‘serious issue’ that this was the result of an active ‘enticement’ or solicitation.
“It would not be a breach of the implied term to preserve the confidentiality of HSL’s confidential information merely to accept instructions from an HSL client who, without prompting, chose to move its business to [Blaser Mills].
The judge concluded there was no serious issue to be tried that Ms Jones was undertaking any activity in breach of the pleaded implied term of fidelity.
Had it been relevant, Constable J said he would have concluded that damages would not be an adequate remedy.
The balance of convenience was not in favour of granting the injunction, he went on.
HSL was unable to point to any “particular feature” of Ms Jones’ departure that indicated the restrictive covenants were insufficient.
“In my judgment, the fact that the restraint sought imposes greater restrictions than had been contractually agreed upon in circumstances where there is no evidence of a legitimate business interest which needs more onerous protection weighs, in the balance of convenience, against granting the interim injunction.
“The same point could be put another way: on the evidence before me, I consider that the likelihood of a permanent injunction being granted in wider terms even if HSL establish that the resignation was not accepted, is low.”
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