The decision in question came in the case of Octavio Hernandez v Vodafone Ireland Limited [2013 IEHC 70].
Mr. Hernandez worked for Vodafone from October 2005 until January 2013. His contract of employment contained three provisions which ultimately became the subject of his application for declaratory relief, as follows:
- 9.3 You shall not, without prior written consent of Vodafone, within 6 months after the termination of your employment with Vodafone howsoever caused, directly or indirectly and whether alone or with any other person, either as principal, shareholder, director, employee, agent, consultant or otherwise, work or be engaged or interested in…any business or commercial activity in Ireland which competes or conflicts (or is likely to compete or conflict) with any business interest or commercial activity of Vodafone.
- 9.4 You shall not, without prior written consent of Vodafone, within 6 months after the termination of your employment with Vodafone howsoever caused, directly or indirectly and whether alone or with any other person, solicit or entice away or attempt or cause others to solicit or entice away from Vodafone any person who shall have been an employee, customer, or agent of Vodafone in the 6 months immediately preceding the termination of your employment.
- Clause 10 was headed “Confidentiality” and contained detailed provisions protecting and restricting disclosure by Mr. Hernandez of information obtained during his employment relating to any aspect of Vodafone’s business, which may be reasonably regarded as being of a confidential nature.
Mr. Hernandez resigned from his employment with Vodafone in order to take up a position with 02/Telefonica with a start date of 21 January 2013. In addition to corresponding with Mr. Hernandez following his resignation, Vodafone wrote to 02 pointing out that Mr. Hernandez was subject to “…a strict six month non-compete and non-solicitation provision and a comprehensive confidentiality clause…” and that Mr. Hernandez would be in breach of his obligations if he took up employment with 02 before 24 July 2013.
Following correspondence between solicitors, Vodafone and 02 agreed that Mr. Hernandez could take up his position with 02 on 1 May 2013. Ultimately however, this agreement left Mr. Hernandez without any source of income from 24 January 2013 until 1 May 2013 so he issued proceedings seeking a Declaration that clause 9.3 of his contract of employment was void and unenforceable.
In considering whether the tests applicable for interlocutory relief (the three American Cyanamid tests) were met, Judge Laffoy, in the High Court, held there was a fair issue to be tried that Vodafone, by its actions, wrongfully prevented Mr. Hernandez taking up his employment with 02 as of 24 January 2013. The Court also held that even though Mr. Hernandez’s damage in monetary terms was quantifiable, it was of crucial importance to him that he had a continuing source of income in order to meet the needs of his family. In acknowledging that Mr. Hernandez had agreed to be bound by the non-solicit clause (clause 9.4) and the confidentiality provisions (clause 10) and that Mr Hernandez had given an undertaking as to damages, the Court held that the balance of convenience lay with granting Mr. Hernandez the Orders he sought – ie. an Order preventing Vodafone from preventing him from taking up his role with 02.
Although the enforceability of the non-compete clause in Mr Hernandez’s employment contract was not determined by the High Court, the granting of the Order sought by Mr Hernandez effectively allowed him to take up his new position with O2/Telephonica, a direct competitor of Vodafone, notwithstanding the six month non-compete clause in his employment contract.