[case ref 2008 EWHC 1974 (QB)]
In UBS Wealth Management v Vestra Wealth the High Court had to consider an application for an interim springboard injunction where 52 UBS employees resigned as a group and joined a company set up by a former employee, Vestra. Springboard injunctions are usually used to prevent the use of confidential information to gain a competitive advantage.
In this case, the High Court held that springboard relief is available to prevent any future or further serious economic loss to a previous employer caused by former staff members taking an unfair advantage of any serious breaches of their contract of employment. That unfair advantage should exist at the time the injunction is sought and should be shown to be likely to continue unless restrained. In this case, it was clear to the High Court that the senior employees involved had breached their duties of loyalty and fidelity to UBS, having kept silent about planned poaching raids upon the company’s existing staff and client base and having indeed been party to the plans.
The High Court held that Vestra could not, until trial, deal with UBS clients or poach its employees in breach of the senior employees’ restrictive covenants. Mr Justice Openshaw stated ‘Vestra may of course continue to trade, but, as with any start-up business, must build up its own client base and not poach the readymade client base from its previous employers at a time when they are subject to restrictive covenants’.
This case confirms that springboard relief can be applied to any breaches of contract not just misuse of confidential information. It is understood that the parties have now settled.