Mr Chaturvedi worked as NIIT Technologies Ltd's most senior employee in the UK. He resigned and joined a competitor. He made no secret of the identity of his new employer and NIIT did not seek to enforce a non-compete restriction contained in his service contract. His service contract also contained a 12 month non-solicitation of customers clause and provided that the employee would not "offer to employ or engage or otherwise endeavour to entice away from any Group Company any Restricted Person" for 12 months after the end of his employment.
Three months later, another senior employee of NIIT resigned and joined the competitor. In response, NIIT asserted that Mr Chaturvedi had acted in breach of his non-employment covenant and asked for undertakings that he would observe his non-solicitation and non-employment covenants. He refused to provide undertakings and NIIT applied for an interim injunction to enforce the covenants.
That application failed, for a number of reasons. The Court was sceptical about whether a non-employment covenant was even enforceable, given the observation in Dawnay, Day & Co Ltd v De Braconier D'Alphen that a non-employment covenant (as opposed to a non-solicitation covenant) is "indefensible" in an employment contract. There was also a question about whether the definition of a "Restricted Person" – which included any person who could "materially damage the interests of any Group Company" – meant that the clause was unreasonably wide.
However, the key issue so far as the High Court was concerned was the lack of any real evidence to suggest that the employee had in fact acted in breach of his covenants. Although NIIT had tried to suggest that the non-employment covenant could be "blue pencilled" to become a non-solicitation restriction, there was no evidence that Mr Chaturvedi had poached the other employee. The Court could not simply infer this from the timing of the other employee's departure. In those circumstances, NIIT could not rely on Mr Chaturvedi's refusal to give undertakings to support an argument that he intended to breach his covenants. Refusing to give an undertaking did not mean that there was a serious issue to be tried.