In the case of UBS Wealth Management (UK) Limited v Vestra Wealth LLP, the High Court has granted a springboard injunction against the newly formed Vestra Wealth LLP which had poached a large number of UBS staff. The terms of the injunction prevent Vestra from poaching clients of UBS or any more of its employees until a full trial of the issues.
Mr Scott, a former senior employee of UBS, left the company to found a new company, Vestra. He persuaded a large number of employees to join him in his new company, with 52 staff resigning on the same date in May and further 23 leaving to join his company in the new few weeks. UBS investigated the circumstances and came to the conclusion that Mr Scott and four other senior employees has acted together and in secret persuade staff to leave and that the four senior employees had co-ordinated defections while still employed by UBS. UBS therefore asked the Court for a springboard injunction to prevent Vestra from benefiting unfairly from the breaches of contract and conspiracy that it believed had occurred.
The four senior managers and Vestra sought to defend the injunction on the basis that it was Mr Scott, who was free of restrictive covenants at the time, who had masterminded the whole thing. However, the Court found that it was "inherently unlikely" that this was this case and that this was strengthened by evidence of transcripts of telephone conversations showing that Mr Scott had not acted alone. The staff had not left individually, but en masse after secret planning. This was an obvious breach of the employees' duties of loyalty and fidelity. The Court therefore came to the conclusion that UBS was extremely likely to be able to prove at trial that the poaching had constituted a breach of fidelity and lawful conspiracy and therefore the balance of convenience test led them to grant the springboard injunction.
Impact upon employers
This decision shows that it is possible to obtain springboard relief in relation to any breaches of contract by departing employees and not just misuse of confidential information. A springboard injunction can be sought if an employee's earlier breach of contract has given him a head start in competition with his former employer. This was a rather extreme case, and distinguished in part by the unusual amount of evidence available to UBS. It does, however, illustrate the trend that courts are becoming more willing to grant injunctions to protect employers' legitimate business interests. It also demonstrates the legal pitfalls involved in trying to organise team moves.