Decision: The case of Petter v EMC Corporation, which was decided by the Court of Appeal in the Summer, held that where an employee is based in the UK, any dispute about his employment contract must be brought before the UK courts. This principle applies even where the employer is based overseas and where the contract is stated to be subject to the law and courts of another country. The decision has potential to be applied widely as it will impact all disputes linked to an “employment contract”, which the court interpreted widely to include share and stock plans operated by parent companies, not just disputes concerning the terms of the employment contract itself.
Continued impact: Many international employers carrying on business in the UK will operate stock plans governed by the law of another jurisdiction. It is, for example, very common for US companies to operate stock plans governed by New York Law. This case confirmed that, where those plans are extended to UK employees, the UK courts will have exclusive jurisdiction in determining an employee related dispute concerning the plan. This can be particularly important if the plan contains forfeiture provisions or restrictive covenants, as the UK courts may adopt a very different approach to the enforcement of these provisions than the courts of the jursidction governing the rules of the plan. For example, the UK courts will apply UK principles of restraint of trade to determine whether restrictions in a New York law set of plan documents will be enforceable.
Petter v EMC Corporation