(B) FACTS

(D) APPLICATION

The Claimant (“Evrythng”) applies for interim injunctive relief in the form of an order requiring the Defendant (“Mr Gilbert-Rolfe”) to comply with a non-competition covenant in his contract of employment, due to last until 13 June 2023, pending a speedy trial. The Claimant has discovered that the Defendant is currently working for a competitor, in alleged breach of that non-competition covenant.

The application, which was issued on 9 December 2022, is supported by the first and second witness statements, dated 9 December and 20 December 2022, of Mr Niall Murphy, Evrythng’s Executive Vice President, Chief Development Officer and General Manager. Mr Gilbert-Rolfe filed a witness statement dated 19 December 2022 in opposition to the application.

For the reasons set out below, I have concluded that I should not grant the interim relief sought. I will, however, order an expedited trial and, if necessary, certain other interim injunctive relief by way of reinforcement of the undertakings Mr Gilbert-Rolfe has already provided.

Evrythng’s main activity is the provision of information technology services to consumer product manufacturers. In particular, it offers and operates “software-as-a-service” platforms to its customers enabling such customers and their customers to obtain data about physical product items (via data carriers such as QR codes or barcodes). Evrythng serves a wide range of markets including fashion and apparel, food and beverage, tobacco, domestic goods, cosmetics and pharmaceuticals.

Mr Gilbert-Rolfe states that since the late 1990s he has worked in sales in the specific domain of emerging technologies. He started out working in sales at Netscape (a computer services company best known for its Web browser, Navigator, which is now part of America Online (AOL)). Between then and the beginning his employment with Evrythng, he worked in several other senior sales roles.

Mr Gilbert-Rolfe commenced employment as Managing Director, EMEA and Oceania for Evrythng on 1 February 2021. Mr Gilbert-Rolfe describes himself as having been responsible at Evrythng for sales and business development in the EMEA and Oceania regions. Mr Murphy states that Mr Gilbert-Rolfe’s role, essentially, was to lead Evrythng’s sales team: to grow its existing business, onboard new customers and develop channels to market. He says Mr Gilbert-Rolfe was expected to directly manage the existing Sales function. He was a member of the executive team and reported directly to the CEO (who was Mr Murphy at the time of Mr Gilbert-Rolfe’s recruitment). His annual salary was £200,000 (plus eligibility for a discretionary performance bonus and participation in Evrythng’s share option scheme).

Mr Murphy explains that, as part of Mr Gilbert-Rolfe’s role, he was expected to, and did have access to substantial information about and influence over Evrythng’s customers and prospective customers. There is some divergence of evidence about Mr Gilbert-Rolfe’s precise role, since Mr Murphy says Mr Gilbert-Rolfe was inter alia responsible for prospecting for customers, an activity which gave him in-depth access to confidential information about Evrythng, its customers and its prospective customers. Mr Gilbert-Rolfe says he was not personally responsible for prospecting for customers, or undertaking many of the tasks Mr Murphy states he undertook in that context, but managed a team whose responsibility it was to do those things; and that he did not have an individual sales target. Mr Murphy takes issue with this in his 2^nd statement, stating that Mr Gilbert-Rolfe was expected to be personally responsible for prospecting customers; that Mr Murphy attended a number of such meetings with him; that in his experience the head of a sales function is generally expected directly to prospect and engage customers; and that the tone of Mr Gilbert-Rolfe’s correspondence with the companies he solicited (referred to below) suggests a degree of familiarity with his counterparts there consistent with his having had personal dealings with them.

Mr Murphy describes in some detail the types of confidential information to which Mr Gilbert-Rolfe had access, and their importance, including information relating to Evrythng’s strategic objectives, business plans, the product roadmap for the next 18 to 24 months, strategic development plans (usually valid for 18 to 24 months), customer contacts and contracts, prospect databases and market research data. He says Mr Gilbert-Rolfe also had access to Evrythng’s pricing model and contractual terms, product capabilities, service delivery methodology, and Evrythng’s competitive assessments of its value propositions and product capabilities compared to its competitors (including what Evrythng perceived to be its own strengths and weaknesses).

Mr Gilbert-Rolfe agrees that he had access to confidential information, though he takes issue with parts of Mr Murphy’s description, stating that he did not in fact access much of the information that was available to him; that some of the information which Mr Murphy states to be “confidential” clearly is not because it is information in the public domain (for example, because Evrythng has published online much of the information relating to how its software-as-a-service platform operates); and that he does not recognise some of the specific information resources to which Mr Murphy refers to. For example, whilst Mr Murphy refers to “the Claimant’s pricing model”, Mr Gilbert-Rolfe says that to the best of his knowledge there was never a single or formal “pricing model” that the Claimant used with customers.

Mr Murphy replies, in his 2^nd statement, that he would have assumed that Mr Gilbert-Rolfe would in fact access various types of confidential information as part of his job; and that Evrythng’s published information about its products does not represent the totality of what Mr Gilbert-Rolfe knows about it. Mr Murphy also says in his 2^nd statement that:

Mr Gilbert-Rolfe was employed under a written Executive Service Agreement dated 6 January 2021 (“the ESA”). Schedule 1 to the ESA contains obligations regarding the protection of Evrythng’s business interests. It includes a section on Evrythng’s intellectual property (clause 2), and a set of post-termination restrictive covenants (clause 3). The latter provisions are set out in Annex 1. They include an 18-month non-solicitation covenant (cl.3(a)), a 12-month non-dealing covenant (cl.3(b)), 12-month non-poaching and hiring covenants (cl.3(c)-(e)), and a 12-month non-competition covenant (cl.3(f)). The pre-amble and non-competition covenant are in these terms:

The restrictive covenants, including the non-competition covenant, are further explained and limited by the following contractual provisions:

The main body of the Contract contains detailed provisions governing Mr Gilbert-Rolfe’s use of Evrythng’s confidential information both during and after employment.

In early January 2022 Evrythng was taken over by a US company, Digimarc. By this time Mr Gilbert-Rolfe had been promoted to the role of Chief Revenue Officer. Mr Gilbert-Rolfe states that part of the arrangements for the takeover was that, in return for having his share options in Evrythng converted into “replacement equity awards” in Digimarc, Mr Gilbert-Rolfe was required to sign a “Restrictive Covenant Agreement” (“the RCA”) with both Digimarc and Evrythng. The RCA defined Mr Gilbert-Rolfe as “Seller”, Digimarc as “Buyer” and Evrythng as “Company”. It recited that:

In fact, according to the evidence placed before me, Mr Gilbert-Rolfe was not a party to the Share Purchase Agreement (SPA) by which Digimarc acquired Evrythng. However, the SPA listed Mr Gilbert-Rolfe as one of four “Key Managers”, and recital G to the SPA recorded that:

The RCA stated that it had been entered into as a deed, and the execution pages indicated that each signatory (including Mr Gilbert-Rolfe) had signed it as a deed.

The RCA contained differently worded, and more far-reaching, covenants than those set out in the ESA. They included a new non-competition covenant, the provisions relating to which (in addition to § 2.6 quoted above) are as follows:

The RCA does not state how it is intended to relate to the differently-worded restrictions in the ESA, and there is no evidence before me as to what, if anything, was said on that topic to Mr Gilbert-Rolfe at the time. Mr Murphy states in his witness statement that the restrictions in the RCA “were in addition to rather than in substitution for the post-termination restraints in his Service Agreement”, and that Evrythng is not seeking to rely on the RCA at this stage. In his second witness statement, Mr Murphy states that:

On 13 June 2022, Evrythng gave the Defendant three months’ notice of termination (i.e. the notice required under the ESA). He was put on garden leave and his employment terminated on 13 September 2022. Mr Murphy states:

Mr Gilbert-Rolfe adds that from a personal perspective, the termination of his employment was a disaster: “after a huge amount of work and investment of days, evenings, and weekends, we were starting to make real progress with work. I was left with no job, a horrifically damaged reputation, a catastrophic blow to my confidence, and not enough time to find a new role. I am still recovering from the mental blow that this decision made on me.”

Mr Gilbert-Rolfe states that he then quickly started to make efforts to find an alternative source of work and income, applying for over a hundred jobs, and attending some interviews, all broadly in the domain of sales and digital identity. He produces a selection of emails and says all his applications were all unsuccessful until he was offered a consultancy agreement with Kezzler, a Norwegian company which is one of Evrythng’s competitors. Mr Murphy details in his witness statement the considerable overlap between Evrythng’s and Kezzler’s businesses (both companies operating in inter alia the tobacco, food & beverage and apparel markets), and examples of business for which they have both competed. Mr Gilbert-Rolfe states that it was hard to find alternative work partly because of his age, 56, there being a global trend of people over 50 being considered too old for sales roles (and he exhibits a selection of posts on this topic). In addition, he says, prospective employers find it unattractive that he was dismissed from his last employment after a relatively short time.

Mr Gilbert-Rolfe explains how, after an initial contact on 6 July 2022, and a series of ensuing discussions and meetings, Kezzler offered him a consulting contract which commenced on 31 October 2022. This is a sales representative position with a virtual team of 6 (currently), rather than an executive team with 48 reports (as he had when he worked for Evrythng) and pays much less than his job with Evrythng did. Mr Gilbert-Rolfe did not tell Evrythng that he was planning to join, or had joined, Kezzler as a consultant.

Mr Gilbert-Rolfe says Kezzler wishes him to help them build an industry practice, i.e. selling a product to a set of target companies that all operate in a single industry, and he mentions the apparel market in particular. Kezzler is a small company with fewer than 40 employees, who Mr Gilbert-Rolfe believes would find it hard to replace him. However, he says Kezzler have nonetheless made clear to him that they do not currently feel they would be able to keep a position open for him if he were suddenly unable to do anything for them for 4 or 6 months. There is at present no evidence direct from Kezzler on this point, though it seems inherently plausible that if Mr Gilbert-Rolfe had to cease work for them now, Kezzler would not keep a job open for him, bearing in mind the inevitable uncertainty about whether the injunction would be lifted following a trial or whether they would have to wait another 5½ months (until the non-competition covenant expired) before being able to use his services.

Between 8 and 17 November 2022 Mr Gilbert-Rolfe sent five emails to four leading apparel companies on behalf of Kezzler. One of these was then forwarded to Evrythng by the recipient, and the other four were disclosed by Mr Gilbert-Rolfe (through his solicitors) following correspondence from Evrythng’s solicitors.

The first of these emails, dated 8 November 2022, said this:

The first redacted passage refers to an action said to have been taken in relation to customers. The second is a percentage figure.

The second email, dated 14 November 2022, was as follows (with redactions of passages said to be commercially sensitive):

The third email, also dated 14 November 2022, was as follows (with redactions of passages said to be commercially sensitive):

The fourth email, dated 15 November 2022, was in similar vein, though not mentioning the pricing information cited in the first two. The fifth email, dated 17 November 2022, appears to have been a follow-up to the second one.

Mr Gilbert-Rolfe says he sincerely regrets sending these emails, and should not have done so, though he indicates that he did not send them believing that what he was doing was a breach of valid restrictive covenants owed to Evrythng. He disagrees with some of the ways in which Mr Murphy characterises what he did (saying that for example he does not understand how referring in the most general terms to being aware of Digimarc’s future strategy involves disclosing confidential information) but accepts the general criticism that he should not have sent these emails. He adds that nothing came of any of them.

On 22 November 2022 Evrythng’s solicitors wrote to Mr Gilbert-Rolfe referring to the second email, dated 14 November 2022, which had been forwarded to it by the recipient. Evrythng’s solicitors asked Mr Gilbert-Rolfe to give various undertakings, set out in an attached document. He took legal advice, and his solicitors wrote back on 5 December 2022 with a signed undertaking covering all of the material undertakings sought apart from the requested non-competition undertaking (which Mr Gilbert-Rolfe says would have required him to immediately resign from his consultancy with Kezzler and to forego his income). The undertakings read as follows:

Mr Gilbert-Rolfe states that he fully intends to comply with all of the undertakings he has given, and has no intention of doing anything which would place him in breach of them.

Counsel for Mr Gilbert-Rolfe indicated in oral argument that Mr Gilbert-Rolfe would be willing to give corresponding undertakings formally to the court, attracting the potential sanction of committal for contempt, save that he would not wish to do so in relation to (as I understood it) undertaking 1 above as currently formulated, due to insufficient clarity about what it would and would not prevent Mr Gilbert-Rolfe from doing.

The undertaking requested by Evrythng which Mr Gilbert-Rolfe declined to sign read as follows:

Evrythng’s solicitors’ letter also asked Mr Gilbert-Rolfe to provide full details of his contacts with Evrythng’s customers, leading in due course to his disclosure of the remaining emails.

Evrythng’s solicitors also wrote to Kezzler, putting them on notice of the situation and the restrictive covenants in the ESA, and among other things seeking Kezzler’s assurance that it will “prevent Mr Gilbert-Rolfe from working for Kezzler in any manner which causes him to breach his non-compete obligations in his agreement with our Client”. Kezzler replied saying:

Evrythng issued the Claim Form and Application Notice on 9 December 2022. The Application Notice was sealed on 12 December. Mr Murphy’s witness statement includes the following points in support of the need for an injunction notwithstanding the undertakings already provided:

Mr Gilbert-Rolfe’s evidence on the specific topic of the proposed injunction includes the following points. He explains that he has no paid work other than his consultancy with Kezzler, and struggled a lot to find work until the Kezzler role came up. He has high monthly overheads and no other way of servicing them, including £700 per month in mortgage repayments on his home in Brixton, £600 per month towards the mortgage payments of his elderly mother (who lives alone in a bungalow and who relies on him for financial support), mortgage payments on a rental property (£1,400) and normal council tax and energy costs (£1,200). His dependants include his mother and an autistic son. Mr Gilbert-Rolfe says he has no savings, debts of £6,000, and no substantial assets other than his home and the rental property which is heavily mortgaged. Although he was well paid while employed by Evrythng, he used significant amounts of money to clear debts totalling £40,000 and started renovations to his home (not expecting to lose his job). He also had to travel to the USA to see his father, who has terminal lung cancer. Mr Gilbert-Rolfe’s wife’s cocktail business employs her and one other member of staff, both at a rate of £15 per hour, and has been loss-making from the outset.

Mr Gilbert-Rolfe says that, if the non-competition covenant were applied in accordance with its terms, he does not know how he could apply for employment using the skillset he has. The only area he can use it is in digital identity, particularly in apparel and retail, and he has not worked outside of that sector for near on twenty years. In addition, being a 56-year-old man who has just been dismissed and cannot explain why, has hindered his ability to find work. Even if he did find a much lower paid job (less than what he is earning now), he would lose his house, which would probably also mean closing down his wife’s business. If required to stop working for Kezzler, Mr Gilbert-Rolfe says he would have no income, £6,000 of bills a month, reasonably significant debts and would be looking for a job in the middle of a recession at the age of 56. It would genuinely be a crisis and he would likely face financial ruin.

The exhibits to Mr Gilbert-Rolfe’s witness statement include documents on some of these points: job application communications (including one specific rejection message) and published materials about the difficulty in obtaining employment in the sector at Mr Gilbert-Rolfe’s age. In addition, prior to the hearing he served (though did not exhibit) a bundle of documents including bank statements for the account into which he is paid (though not statements for a joint account held with his wife and said to be used for household expenses), invoices relating to the property renovations, and credit card statements. These are supportive of his account to a degree, though they do not present a full picture. For example, it is not clear whether, or where, they evidence the various mortgage payments which Mr Gilbert-Rolfe says he makes.

The starting point is that the Court should apply the principles in American Cyanamid Co v Ethicon Ltd [1975] AC 396, namely: (a) there must be a serious issue to be tried; (b) damages must not be an adequate remedy; (c) the court must consider which side the balance of convenience favours: see, e.g., Lawrence David v Ashton [1989] ICR 123 CA p.131.

As to the first stage, serious issue to be tried, Nugee LJ stated in the recent case Planon v Gilligan [2022] IRLR 684 that:

Nugee LJ continued:

In Lansing Linde Ltd v Kerr, cited in the passage quoted above, Staughton LJ said:

As to the substantive issue of whether a non-competition covenant is enforceable, the following summary, based mainly on the judgment of Sir Christopher Slade in Office Angels Ltd v Rainer-Thomas & O’Connor [1991] IRLR 214 CA, at p.217, was largely common ground:

Evrythng also relies on the following statements of principle:

Turning to the second part of the American Cyanamid test, damages will often not be an adequate remedy for the employer. As Goulding states:

Damages may also be an inadequate remedy for the employee. In Planon, Elizabeth Laing LJ (with whom Nugee LJ agreed) said there was no rule of law to the effect that damages are an adequate remedy for the employee, adding:

The balance of convenience involves the court taking account of all of the circumstances of the case and deciding which path carries the lower risk of irremediable prejudice: see, e.g., National Commercial Bank Jamaica Ltd v Olint Corp Ltd [2009] 1 WLR 1405, §17.

Where factors are evenly balanced, the court should seek to preserve the ‘status quo’. The key authority on “status quo” is the decision of the House of Lords in Garden Cottage Foods v Milk Marketing Board [1984] AC 130, where Lord Diplock said:

In Planon, for example, Elizabeth Laing LJ said:

On the other hand, there is some support (in logic and authority) for the view that a defendant cannot improve his position in terms of the status quo by persisting in his wrongdoing or keeping it secret. As to the former, in Frank Industries v Nike Retail [2018] EWCA Civ 497, a passing off case, Lewison LJ stated that the interval (which was a matter of days) between the start of the offending advertising campaign and the cease and desist letter was so short that the relevant status quo was that which pertained before the start of the campaign, adding “I do not consider that [the defendant] can improve its position by pushing on in the face of reasoned complaints”.

Finally, Mr Gilbert-Rolfe cited the recent decision in Quilter Private Client Advisers Ltd v Falconer [2022] IRLR 227, finding a 9-month non-competition covenant to be unenforceable, taking account inter alia of the facts that (i) the employer had adduced little evidence to demonstrate that the non-competition covenant was no wider than reasonably necessary; (ii) the employee had been subject to a period of probation, during which her employment could be terminated with 2 weeks’ notice (and the non-competition covenant would have applied to bar her from working for a competitor for 9 months even if she was dismissed during probation); (iii) the non-competition covenant applied even if the employee left very soon after she arrived, despite the employer’s evidence that enduring personal relationships with clients took a long time to build in the industry; (iv) the employer’s interests could have been protected sufficiently by non-dealing covenants; and (v) the nation-wide nature of the employer’s business meant a “geographical carve out” was of little practical effect (§ 175).

It is logical to begin with the question of the applicability and enforceability of the non-competition covenant in the ESA, though bearing in mind that the present application is not the occasion for the court to form any definitive view about it. Mr Gilbert-Rolfe makes two submissions:

Mr Gilbert-Rolfe submits there is at least a serious doubt about whether the ESA restrictions apply, in the light of the parties having subsequently entered into the RCA. Mr Gilbert-Rolfe notes although Evrythng has repeatedly made clear that, for the purposes of this application, it relies only on the ESA restrictions and does not place any reliance on the RCA, it is unclear whether the former survived the latter. Evrythng required Mr Gilbert-Rolfe to enter into the RCA, which contains completely different restrictive covenants cutting across those in the ESA, and the RCA contains no indication that the parties nevertheless intended to preserve the very different covenants in the ESA.

Evrythng submits that the RCA can be disregarded because no consideration for it was provided to Mr Gilbert-Rolfe. That is a slightly surprising contention given that it appears to have been Digimarc and/or Evrythng who prepared the form of the RCA and required Mr Gilbert-Rolfe to sign it, but I leave that point to one side. Evrythng’s submission is that § 2.6 of the RCA is incorrect in stating that the consideration for Mr Gilbert-Rolfe agreeing to the RCA restrictions was “included in the consideration due to [Mr Gilbert-Rolfe] pursuant to the SPA”. Mr Gilbert-Rolfe was not in fact a Seller under the SPA, and recital A to the RCA is wrong in that respect. Further, the exchange, provided for in the SPA, of Mr Gilbert-Rolfe’s existing unvested share options relating to Evrythng for replacement equity granted by Digimarc did not constitute a benefit for Mr Gilbert-Rolfe, because the exchange was designed simply to provide equivalent economic value.

I have some doubt about those contentions. As noted earlier, recital B to the RCA recorded that it was a condition of the SPA that Mr Gilbert-Rolfe enter into the RCA. Recital G to the SPA recorded that Mr Gilbert-Rolfe and others were entering into the RCAs concurrently with the execution of the SPA and as a “material inducement to the willingness of [Digimarc] to enter into” the SPA. So Digimarc’s entry into the SPA, including the provision in Article 2.4(e) for the issue of replacement equity awards, could reasonably be regarded as a quid pro quo for Mr Gilbert-Rolfe entering into the RCA. I do not consider that it can be assumed, at least without further enquiry and/or evidence, that the issue of replacement equity awards provided nothing of value to Mr Gilbert-Rolfe. That would depend on what, if any, value his existing unvested options would have had if they had remained options over shares in Evrythng after it became (presumably) a wholly-owned subsidiary of Digimarc. It seems rather unlikely that the exchange carried no benefit from Mr Gilbert-Rolfe’s point of view. A question might arise (though it was not canvassed before me in these terms) about whether Evrythng, as opposed to Digimarc, provided any consideration for Mr Gilbert-Rolfe’s covenants under the RCA, but that could in turn lead to questions about the nature of those covenants (joint or joint and several promises), and about whether Evrythng provided consideration by continuing to employ Mr Gilbert-Rolfe following the execution of the RCA. There would also be a potential argument that the RCA covenants were binding in favour of Evrythng (even if not necessarily enforceable by injunction) by reason of having been executed as a deed.

For those reasons, I am not persuaded that the RCA can simply be disregarded at this stage on the ground that no consideration was provided for Mr Gilbert-Rolfe’s covenants.

Evrythng also submits that the RCA restrictions in any event did not supersede the 2021 covenants. The RCA covenants cover a different period – two years from the date of the SPA, rather than a period commencing on termination of employment – and serve a different purpose. Evrythng suggests that the two sets of restrictions continue alongside each other for the period of overlap.

That submission too appears reasonably open to doubt. It is true that the two sets of covenants apply during different periods, and may serve different purposes (the RCA being linked specifically to Digimarc’s investment in the business pursuant to the SPA). However, according to their terms, the periods of application of the two sets of covenants overlap if (as in fact occurred) Mr Gilbert-Rolfe’s employment ended during the two-year period following the SPA. Moreover, the RCA covenants were given in favour of not only Digimarc but also Evrythng.

It is, however, difficult to see how both sets of restrictions could apply during any such overlap period, because they are incompatible. For example, the ESA non-competition covenant contained the express ‘functional’ limitation quoted earlier, i.e. “[n]one of these restrictive covenants shall prevent you from being engaged or concerned in any business concern  insofar as … your duties or work shall relate solely to services or activities of a kind with which you were not concerned to a material extent in the 12 months before Termination”. The RCA non-competition covenant contained no such exception. So it would prohibit Mr Gilbert-Rolfe from doing something which the ESA non-competition covenant in substance expressly permitted him to do.

If both sets of restrictions cannot be applied simultaneously, then it will be necessary at trial to decide which of the two prevail; or whether, in fact, the parties should be taken to have intended that the RCA restrictions, as the set of restrictions agreed later in time, simply replace the ESA restrictions during the two-year period for which the RCA applies (which seems a real possibility). If the latter is the correct position, then Evrythng would need to persuade the court at trial that either (a) the RCA non-competition covenant is enforceable or (b) if not, that the ESA restriction revives (even during the ostensible applicability period of the RCA). Evrythng does not at present advance a specific case on either (a) or (b).

I am not required, and probably would lack sufficient information, to form a definite view on this issue. However, insofar as it may be relevant to the first and third stages of the American Cyanamid test, my provisional view is that for the reasons given above there is a significant doubt about the applicability of the ESA non-competition covenant following the execution of the RCA.

Mr Gilbert-Rolfe’s second submission is that even if the ESA non-competition covenant applies, it has not been shown to be no wider than reasonably necessary for the protection of Evrythng’s legitimate interests. He submits that:

I see force in some but not all of these points. The covenant, at 12 months, is probably at the outer limit in terms of acceptability, though that is mitigated to a degree by the fact that the period of (paid) garden leave takes up the first three months of it. The geographical limit is of little benefit from the employee’s perspective, given the very broad area to which the job related (contrast, for example, Law by Design, where the covenant applied only to the North West of England plus the area of a specified clinical commissioning group).

As to functional limitation, the covenant upheld in the case Mr Gilbert-Rolfe cites, Law by Design, contained an exception for “being engaged or concerned in any business concern, provided that the Employee's duties or work shall relate solely to services or activities of a kind with which the Employee was not concerned to a material extent in the 12 months before Termination”. That is similar to the functional limitation in the present case. Asked in oral argument what in practice that would cover, counsel for Evrythng suggested that it would mean Mr Gilbert-Rolfe could not be involved in a sales role. Since the post for which Evrythng recruited Mr Gilbert-Rolfe was a senior sales role, it is inherently likely that his main experience and expertise would lie in sales, and on a fair reading of his CV I consider it largely focussed on sales-related activities. So from Mr Gilbert-Rolfe’s point of view, the functional limitation would not significantly alleviate the restrictive nature of the covenant.

On the other hand, the fact that the functional limitation restricts the covenant to activities of the kind Mr Gilbert-Rolfe undertook for Evrythng (broad as it may be), is a factor in support of its enforceability since it helps tie the covenant to Evrythng’s legitimate interests and the risks it may face. Further, whilst it is true that the evidence from Evrythng at this stage as to why a non-competition covenant in these terms is reasonably necessary to protect its interests is relatively brief, I consider that the evidence from Mr Murphy referred to in §§ 8 and 10 above provides at least the beginnings of an explanation for the scope and duration of the restrictions in the present case, linking them to Evrythng’s typical sales cycle and the length of time it would take a replacement to build up relationships with the customers. It would not necessarily be practicable to provide a large amount of supporting detail or documentation at the interim relief stage (just as Mr Gilbert-Rolfe has, in support of his evidence as to the effect of the proposed injunction on him, not so far provided full documentation). Mr Gilbert-Rolfe was a senior employee who accepts that he had access to confidential information.

As to the fact that the non-competition covenant applies even where the employee is dismissed (on short notice) during the probation period, I acknowledge that the court in Quilter regarded that as a factor against the enforceability of the covenant there. On the other hand, that does not appear to be factor highlighted in other cases, and counsel informed me that it is uncommon (or perhaps even unknown) in practice to see non-competition covenants with graduated effect so that their duration is shorter in the event of dismissal during a period of probation. Moreover, as indicated in Egon Zehnder Ltd v Tillman [2017] EWHC 1278 (Ch) § 27, when assessing the position as at the start of the employment relationship, it is appropriate to consider what the parties are likely to have envisaged looking forward (which might include promotion, and would certainly include the employee being kept on after the probation period). I am not persuaded that the probation period point is a significant factor.

Overall, my provisional view for present purposes is that it is well arguable that the ESA non-competition covenant is enforceable. However, I would not put it higher than that: there remains scope for argument that Evrythng has not (provisionally) justified a covenant of the broad scope and long duration of this covenant.

The considerations set out above lead me to conclude that there is a serious issue to be tried as to the applicability and enforceability of the ESA non-competition covenant. I am not persuaded by Mr Gilbert-Rolfe’s submission that the doubts referred to in sections (1) and (2) above mean there is no serious issue to be tried. They are, however, factors to which it is appropriate to have some regard at the third stage in the circumstances of this case.

I consider that damages would be unlikely to provide a sufficient remedy for Evrythng, for the reasons Mr Murphy gives in the passages quoted in § 37 above, concerning the difficulties in policing the other covenants and proving breach or loss.

I doubt that damages would provide an adequate remedy for Mr Gilbert-Rolfe either. I refer in §§ 38-40 above to Mr Gilbert-Rolfe’s evidence about the effect the proposed injunction would have on him. As I note earlier, his account is not fully supported by documents. On the other hand, he does provide some support for his evidence that he have found it, and would find it, very difficult to find work (given his age and skillset) or to meet his financial commitments if he were suddenly required to stop working for Kezzler. I do not accept Evrythng’s assertions, which seem to me to lack any real basis, that Mr Gilbert-Rolfe is likely to have substantial resources available to him and that the period of unemployment is likely to be short. My provisional view is that the grant of the injunction would be likely to have a severe, and quite possibly ruinous, effect on him and members of his family. The comments of Bean LJ (with whom Nugee LJ agreed) in Planon are in my view pertinent in the present case.

Turning to the balance of justice, it is perhaps artificial simply to look for a ‘status quo’, whether that be Mr Gilbert-Rolfe’s position before he started work for Kezzler as Evrythng suggests, or his current position having started work for Kezzler, as Mr Gilbert-Rolfe suggests. Either of those approaches carries the risk of losing sight of the underlying question of what is just and appropriate, which requires consideration of the degree of irremediable harm which the grant or refusal of the injunction would cause.

I do not find the balance particularly easy in the present case. I bear in mind, among other factors, the genuine areas of doubt considered in sections (1) (in particular) and (2) about the applicability and enforceability of the ESA non-competition covenant. It is relevant to have some regard to those matters, bearing in mind that even an expedited trial could not reasonably be expected to result in judgment before mid March. By that time, 9 months of the total 12 months’ duration of the covenant would have elapsed. The grant of an injunction now would therefore give Evrythng a significant portion of the relief it would seek at trial.

I bear in mind that if the injunction is not granted, Evrythng could suffer irremediable harm from misuse (deliberate or inadvertent) of sensitive commercial information which Mr Gilbert-Rolfe knows about from his work there. On the other hand, that risk is or can be mitigated to a degree by the facts that (a) Mr Gilbert-Rolfe, having taken legal advice, has given undertakings in respect of non-solicitation and non-use of confidential information, and has accepted that the five emails (four of which he disclosed himself after the other came to Evrythng’s attention) should never have been sent; (b) Mr Gilbert-Rolfe has expressed willingness to give corresponding undertakings to the court, subject to one exception relating to confidential information, and the court can if necessary address that exception by granting an injunction in appropriate terms; (c) Kezzler is now on notice of the restrictions which apply to Mr Gilbert-Rolfe, and must know it would be at risk of legal liability were it to encouraged any further infringement; and (d) I can order an expedited trial, with the result that the risk of harm to Evrythng would be limited to the incremental loss of the protection of the non-competition covenant (i) over and above the other restrictions referred to in (a) and (b) above, and (ii) during the limited period between now and an expedited trial.

Set against that, although it is impossible to be certain, I consider that even with an expedited trial timetable, the grant of an injunction would carry a substantial risk of Mr Gilbert-Rolfe losing his post with Kezzler, and being unable to find employment at all for a very considerable time, with serious adverse consequences for him and his family.

Weighing up these various considerations, I have concluded that it would not be just to grant the interim relief sought. Instead, I shall transfer the case to the general King’s Bench list (it being more appropriate there in terms of nature and value) and order an expedited trial timetable as follows:

I shall also grant injunctions, unless suitable undertakings to the court can be agreed, to reflect the terms of the undertakings which Mr Gilbert-Rolfe has already given contractually, subject to hearing counsel as to the need for more specificity as to what is and is not permitted with regard to confidential information.

For the reasons set out above, I decline to grant an interim non-competition injunction. I shall, subject to hearing counsel further, make the further directions and, if necessary, injunctive relief referred to in §§ 77 and 78 above.

Definitions

Intellectual property

You agree:

Restrictive covenants

You recognise that as a result of your employment, you will have had access to confidential information and/or contacts of the Company (such as clients or staff). As a result you covenant with the Company that you will not during your employment and:

None of these restrictive covenants shall prevent you from being engaged or concerned in any business concern insofar as: