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Interim injunction granted to enforce restrictive covenants

13 December 2016

The court has granted an application for an interim injunction against the claimant’s former employee to enforce non-competition restrictive covenants and confidentiality clauses in his employment contract. This was despite the defendant offering a payment to cover his former employer’s potential loss.

In the case of Ropner Insurance Services LTD (C) v (1) Philip Wood (D) (2) Clearwood International LTD (D2) (2016) QBD, D had resigned from C and had asked to be released from his restrictive covenants subject to him paying C for any potential loss.

C refused payment as it had found that some of its clients had not renewed policies and they had stated that they were transferring their business to D. This potential loss of future business was extremely difficult to quantify and C also suspected that D would be unable to pay the monies over. D was also found to have forwarded confidential documents to his personal email account.

Judge Moloney QC applied the American Cyanamid Guidelines and agreed that damages would not be an adequate remedy. An interim injunction was therefore granted, which forbid D in carrying out any further business with the clients he had gained through C and to pay C £21,000 in damages.   

The question as to the enforceability of the restrictive covenant will be tried at trial.   

This case demonstrates that the court fully assessed the commercial risk and decided that an injunction was more appropriate than a money payment.

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