It is often difficult to identify what information is confidential (and therefore protectable) among the data that employees have taken. Whilst in employment, the scope of the implied duty of confidence is wider than after termination, and case law (Faccenda Chicken v Fowler) has distinguished between the information that is confidential during the employment relationship (known as category 2) and the narrower category which remains confidential post-termination, and which is limited to trade secrets or similar (category 3).

In this case, the fact that the employees had breached their duty of fidelity by copying, retaining and deleting confidential information during their employment (i.e. while they were under a higher duty of confidence) meant that it was not necessary to establish whether the information that they retained fell into category 3. Springboard relief was awarded to remedy the unfair advantage caused by the defendants’ past misuse of category 2 information as well as potential category 3 trade secrets.

The misuse of information while in employment, coupled with concerns about seemingly duplicitous behaviour of the employees when asked to deliver up, lent substantial weight to the argument that they were likely to further misuse confidential information in the future and that therefore a springboard injunction was appropriate.

In order to grant an interim injunction, the court must be satisfied that there is a prima facie case to answer and that damages would not be an adequate remedy for the wrongdoing. In this case, the judge readily accepted that once confidential information has been stolen, the substantial damage that its misuse could cause to the claimants would be hard to quantify, and even harder to recover.

The company asserted that each of the defendants owed fiduciary duties while in employment (which include a heightened duty of undivided loyalty to the employer and a clear duty to report one's own wrongdoing as well as that of others). However, demonstrating this proved unnecessary, as the court agreed that there was a serious arguable case that all three employees had breached their implied duty of good faith and fidelity (a duty owed by all employees) by colluding to leave their employer together in order to compete and in concealing this from their employer.

Although a judge will need to be convinced on the evidence available in each case, this case confirms that, where employers can demonstrate their suspicions of an orchestrated, concealed team defection by senior employees who intend to compete, this will amount to a serious breach of the duty of fidelity. Here, the findings that the defendants all appeared to have misused confidential information, and intended to do so in the future, also influenced the judge’s view that they were plotting together to defect.

A springboard injunction prohibits employees from taking unfair advantage of the 'springboard' that their unlawful activity has given them. It was first used to prevent a former employee from using a card index full of client contact details that he had stolen from his former employer, and is an invaluable tool for recruitment companies seeking to protect themselves from the misuse of databases.

It is only recently that courts have begun to grant springboard injunctions in cases other than breaches of confidence, and this case supports an emerging line of authorities that accepts that businesses may need the protection of springboard injunctions in other instances of unlawful competition. Here, if the team were allowed to join the competitor before the full trial was heard, they would unfairly profit from the head start that their breaches of fidelity afforded them in the set up of a competitive business, a business which threatened to cause substantial damage to their former employer.

The judge also provided a number of helpful pointers on difficult pre-action considerations that recruitment businesses have to grapple with quickly when faced with a team defection and the suspicion of misuse of their information:

• Pre-action negotiations: The parties’ reasonableness in pre-action conduct is an important factor that is taken into account by the court. Recruitment businesses face a difficult choice between going straight to court without notice to the defendants, or pausing and trying to negotiate undertakings before they do so. If they do the former, they risk being criticised for not giving the defendants an opportunity to explain themselves and provide undertakings which may obviate the need for court proceedings, whereas if they choose the latter, they risk further damage being done to their business, the loss or destruction of confidential information and evidence, and criticism of delay. Here, the claimants first sought undertakings. The defendants refused because the undertakings went further than their contractual restrictions. Further, they denied that the new employer was a competitor (which was subsequently found to be untrue by the judge). While these negotiations did not initially produce more than partial delivery up of confidential information, they turned out to be very useful, as the judge relied on the fact that the defendants had both refused to provide undertakings and denied that their new employer was a competitor in support of his decision that there was a basis for springboard relief.
• Delay: Injunctive relief is any equitable remedy, and undue delay in seeking this relief is likely to jeopardise the chances of obtaining it. The defendants sought to use the claimants' delay (of around four weeks) to convince the judge not to exercise his discretion to grant the injunction. The judge recognised that “it is always difficult for claimants in these circumstances to know exactly when they have sufficient to persuade a court of the risks involved", and held that although the claimants could have been quicker in making their application, this should not deprive them of the relief to which they were otherwise entitled.
• Evidence: So how much evidence is required? Interestingly in this case, the claimants had no actual evidence that the defendants had actually misused information to compete but this was the conclusion they, and the judge, came to when the defendants failed to deliver up and began wiping information. The claimants could have chosen to make their application when they first received mobile phones back from the defendants that had been wiped of all data, as negotiating the delivery up of information and then having IT forensic experts analyse it takes time. However, the evidence that the claimants obtained from IT experts, and how this differed from the defendants' witness evidence, formed a key part of the judgment against the defendants in this case. A short period of thorough investigation before instigating court proceedings is often wise, and obtaining early IT forensic evidence can be invaluable.
• Who to sue? While in most cases claimants bring proceedings against both the defecting employees and their new employer, and for good reason, the claimants chose not to in this case for commercial reasons. This turned out to be a wise move as far as their interim application was concerned, as it supported the claimants’ arguments that damages against the individual ex-employees would not be an adequate remedy, as they were unlikely to have substantial personal assets.

Although the claimants here did not sue the team's new employer, recruitment businesses that take on teams from a competitor will usually find themselves brought into any litigation that ensues on the basis that they have induced breaches of contract by the consultants, and because they have the deeper pockets. As their new employer, the business should be careful to ensure that the individuals concerned do not make a defendable situation much worse.

The judge was very critical of the defendants, whose evidence he clearly disliked, but the following points are useful to bear in mind when standing behind consultants who are threatened with court action:

• Although the employees stated who they were joining in their resignation letters (which is a lot more than many employees are willing to do), the fact that they kept their joint decision to leave secret until that point greatly contributed to the finding that there was an arguable case that they had breached their duty of fidelity. Realistically, however, this is not likely to change in the future, particularly where disclosing a fellow team member’s intentions will blow their own cover.
• The defendants’ denial that they remained bound by a duty of confidence in relation to the information they had taken, and their denial that their new employer was a competitor, both backfired. The former added weight to the argument that they would continue to misuse the information, and both helped the claimants obtain springboard relief.
• Although the defendants offered a warranty that they would not misuse confidential information during negotiations, the decision not to provide undertakings prompted court action and also influenced the finding that the relief sought was appropriate in the circumstances. While undertakings are often sought in very wide terms, it is usually worth considering them carefully rather than dismissing them outright. If there is any concern as to the actions of new hires, the avoidance of legal proceedings altogether, and the heavy costs that will likely result, is almost always worthwhile.
• The defendants were heavily criticised for destroying evidence. They appeared to be unaware that running file deletion programmes multiple times on their computer equipment in the 24 hours before they delivered up that equipment for inspection would be detected by an IT forensic analysis. They had also wiped memory sticks and mobile phone records. In their defence, they claimed that wiping all data was the only way to protect their own personal data in the time available. While the judge conceded that, in isolation, this would be reasonable, “in light of the other evidence of deletion and destruction of data it takes on a potentially more sinister aspect”.
• The defendants also appeared to fail to appreciate that attaching multiple external devices to computers would be detected by IT forensics, and that this would look highly suspicious to a judge. Further, they ripped out significant diary entries before handing over paper diaries, and destroyed memory sticks. It is always important to ensure that individuals do not tamper with evidence once they are on notice of a potential claim – any such activity will be easily detected and will look highly incriminating in front of a judge.
• Ensure witness evidence is accurate and consistent with any pre-action correspondence, and consider whether it will tally with any IT forensic reports commissioned by the claimant. This caught to defendants out here, and the judgement contained careful analysis of how the defendants' evidence was not supported by the IT report and therefore appeared to be unreliable. Any statements should be complete and thorough, with difficulties confronted early on – adverse inferences were drawn in this case from the fact that the defendants had not been upfront about their earlier considerations of defection.
• Once proceedings had been issued, the defendants agreed to a last-minute consent order to cover the period up to the interim hearing, in broadly the form later given by the judge. However, it became apparent during an examination of the evidence that at least one of the defendants was in breach of that order by failing to deliver up all confidential information. This clearly did not add to their perceived trustworthiness in the eyes of the judge.

Many of the defendants’ actions were found to be suspicious by the judge, who then used those suspicions to find that they were likely to continue to misuse information and use their unfair competitive advantage to the detriment of the claimants if injunctive relief was not granted.