ICAP Management Services Ltd v (1) Dean Berry (2) BGC Services (Holdings) LLP [2017] EWHC 1321 (QB)

The High Court held that an employee cannot avoid his contractual obligations to his employer by alleging a TUPE transfer (when his employer was acquired) and then objecting to that transfer.

Mr Berry was employed by ICAP Management Services Limited ("ICAP"), which provides brokerage services. His contract of employment included a 12-month notice period.

On 22 July 2016, Mr Berry gave notice to ICAP to terminate his employment. Two days later, the second defendant, BGC Services (Holdings) LLP ("BGC"), a competitor of ICAP, issued a public announcement that Mr Berry would be joining the company as an executive managing director. Mr Berry was placed on garden leave by ICAP a day later.

On 30 December 2016, Tullett Prebon Plc ("Tullett"), another brokerage house, acquired the entire issued share capital in ICAP's parent company. Presumably seeking early release from his garden leave, Mr Berry claimed the Tullet transaction triggered a TUPE transfer, to which he objected, as it would mean that his employment with ICAP terminated by operation of law.

ICAP applied for an interim injunction to enforce Mr Berry’s garden leave.

The High Court held that a transfer under TUPE had not taken place, because the ICAP and Tullett businesses remained distinct, in competition, and functioned in the same way as before the merger took place. ICAP was therefore entitled to an injunction against Mr Berry, who will remain subject to his contract of employment with ICAP until the expiration of the 12 months' notice period.

In addition to serving as a reminder that TUPE transfers are not typically triggered in the context of share acquisitions, the case highlights one of many strategies that employees may use in a bid to avoid lawful restraints on competition. It also demonstrates that Courts will be alive to such strategies and will undertake a full enquiry into the factual matrix in order to ensure that parties are held to the bargains into which they enter.