Tradition Financial Services Ltd v Gamberoni & Ors

The reality is that this is a dispute between two inter-dealer brokers. The Claimant (C) and the 2^nd and 3^rd Defendants (D2 and D3) are inter-dealer brokers.

The 1^st Defendant (D1) worked for C until towards the end of October 2016, but is now employed by D2 (which is part of the D3 group). The principal issue is whether he is entitled to work for D2 before the end of a “non-compete” clause in the contract of employment between him and C which, if lawful, would preclude him from doing so until 1 May 2017. There are other issues connected with the basis upon which he might work for D2 in the meantime if the non-compete clause was held to be invalid. Hereafter I will refer to the defendants other than D1 as ‘D’.

An inter-dealer broker (‘IDB’) acts as an intermediary between major dealers to broker or facilitate inter-dealer trades. One of the markets in which C and D are involved is the energy (or power) market where the supply of energy (e.g. electricity) is traded. An IDB in this field brokers deals in energy and energy-related physical and derivative products (including electricity) and exchange-traded futures and options.

Where a client approaches an IDB, any party with which that client becomes linked contractually following the introduction by the broker is known as the “counterparty”. The effectiveness of an IDB depends to a large extent on what is termed the “liquidity” of its position. This was described by Mr Michael Anderson (see paragraph 33 below) as “how easily a broker can find a counterparty for a particular transaction”. The greater the number of potential counterparties that at any one time an IDB can contact at the largest spread of prices, the greater its liquidity.

In Tullett Prebon Plc v BGC Brokers LP & Ors [2010] EWHC 484 (QB), Jack J, during a lengthy case, had an unrivalled opportunity to gain an understanding of the way in which the IDB world operates. I will not extend this judgment by repeating it, but [11] - [20] of his judgment is, in my respectful view, a very helpful and lucid account of the way this world functions. He refers to the concept of “liquidity” in [12] and the way that a “desk” operates in [12] – [15]. One matter not dealt with in that case (because it was not a case dealing with energy or power brokers) is what I will call for this purpose “the Trayport facility”. I will refer to its potential relevance later (see paragraphs 25-31).

D1, who is an Italian national, was assigned as a “Junior Broker” to C’s “Italian power desk” (also known as the “Italian/Iberian power desk”) although that did not confine him exclusively to trading in Italian power products. On 1 July 2016 he gave C notice under his contract and told them that in due course he would be going to work for D. The focus of the case is on the question of when and in what circumstances he could lawfully commence working for D.

In circumstances to which I will refer, D1 started working for D on the European Power Desk on 3 January 2017, no notice of his intention to do so having been given to C. When C discovered the position a few days later, certain limited undertakings were given on behalf of D1 in correspondence which were not acceptable to C and an application for an interim injunction was made on 13 January 2017 which came before Soole J on 20 January 2017. That application was resolved on the basis of wider undertakings than previously given and that there would be an expedited trial.

It was the expedited trial that came on before me commencing on 13 March 2017.

D’s primary case is that a post-termination restriction (‘PTR’) of three months’ duration would have been all that was reasonably necessary for the protection of any legitimate interests that C might have and that there are, in any event, other features of the PTRs in the contract that render them unenforceable. If, contrary to those positions, the PTRs are prima facie enforceable, it is argued that the court’s discretionary jurisdiction should be exercised to enable D1 to start work again for D2 immediately.

There is a much wider narrative to this case than merely the contractual position as between C and D1, but it is that contractual position that needs to be set out first.

As from 25 September 2013 D1 was employed by C as a trainee broker. The contract under which he was appointed a “Junior Broker” and which is material to this case was dated 20 October 2014, the “effective date” of the contract being 1 November 2014. Subject to the relevant termination provisions (see paragraphs 13 and 14 below), the contract was for an “Initial Term” of two years and was then automatically renewable for successive one-year periods (“Subsequent Terms”) thereafter unless either party gave notice as follows:

“Either party may terminate this Contract by giving written notice … to the other, to be received between 90 and 120 days prior to the expiration of the Initial Term or any Subsequent Term. Provided due notice is given in that time period, the written notice will expire on the last day of the Term applicable when notice is given ….”

There were various provisions requiring D1 to devote his time loyally to C and the following provisions concerning confidentiality and company property:

“4.1.

During the course of your employment you will have access to and be entrusted with confidential information relating to the business of [C] and its Group companies. This may include but not be limited to details of corporate strategy, business development, business methods and processes, database systems, revenue flows, current planned transactions, names of clients, customers and terms of business.

4.2

You may not during your employment (except in the proper performance of your duties) or after its termination use or disclose such information to any person, firm or company not authorised to know it. This will not prevent you using or disclosing information if ordered to do so by a court of law or if authorised by [C] or if such information has become public knowledge otherwise than by unauthorised disclosure.

4.3

Before the end or upon the termination of your employment you should deliver up to [C] (or as it may direct) all original and copy materials, equipment, documents and other property belonging to [C] or its Group companies and which are in your possession or under your control. You may not nor may any person on your behalf retain copies of any documents or other copiable property. You will if requested provide [C] with a signed statement confirming your compliance with this section."

The PTRs, which are the central feature of the present dispute, were as follows:

"14.1

You agree that during your employment and for the periods set out below after its termination (but, if you are suspended for a period in excess of three months during which you are not required to attend for work pursuant to clause 12.5(b), the period of the covenant in clause 14.1(a) shall be reduced by one day for each day of suspension in excess of three months), you will not (except with [C’s] prior written consent) directly or indirectly do or attempt to do any of the following:

(a)

for 6 months undertake, carry on or be employed, engaged or interested in any capacity in either any business activity which is competitive with Relevant Business within the Territory, or any business activity an objective or anticipated result of which is to compete with Relevant Business within the Territory;

(b)

for 6 months entice, induce or encourage a Client to transfer or remove custom from [C] or any Group company;

(c)

for 6 months solicit or accept business from a Client for the supply of Competitive Services;

(d)

for 6 months give advice or provide services with a view to assisting or enabling another person, company or other business entity to solicit business from a Client for the supply of Competitive Services;

(e)

for 6 months entice, induce or encourage an Employee to leave or seek to leave his or her position with [C] or any Group company for the purpose of being involved in or concerned with the supply of Competitive Services or a business which competes with Relevant Business or which plans to compete with Relevant Business, regardless of whether or not that Employee acts in breach of his or her contract of employment with [C] or any Group company by so doing; or

(f)

for 6 months employ, engage or work with an Employee for the purpose of the supply of Competitive Services.

14.2

For the purpose of this clause 14:

(a)

"Client" means a person:

(i)

who at any time during the Relevant Period was a client of [C] or any Group company (whether or not goods or services were actually provided during such period) or to whom at the expiry of the Relevant Period, [C] or any Group company was actively and directly seeking to supply goods or services, in either case for the purpose of Relevant Business; and

(ii)

with whom you or an Employee engaged in Relevant Business reporting directly to you had dealings at any time during the Relevant Period or about whom you or such an Employee were in possession of confidential information in the performance of your or their duties to [C] or any Group company;

(b)

"Competitive Services" means goods or services competitive with those which, during or at the expiry of the Relevant Period, [C] or any Group company was supplying or negotiating or actively and directly seeking to supply to a Client for the purpose of Relevant Business;

(c)

“Employee” means a person who is employed by or who renders services to [C] or any Group company in connection with Relevant Business in a managerial, broking, settlement, computer support, telecommunication or accounting capacity and who in any case was so employed or so rendered services during the period of 6 months ending on the last day on which you actively worked under this Contract for [C] or any Group company and who had dealings with you during that period;

(d)

"Relevant Business" means the areas of business of [C] and/or Group company, with which, pursuant to your duties, you were materially involved at any time during the Relevant Period;

(e)

"Relevant Period" means the period of 9 months ending on the last day of your employment or the period of your employment if shorter than 9 months;

(f)

"Territory" means England and any other country or state in which [C] or any Group company is operating or planning to operate Relevant Business at the expiry of the Relevant Period. [C] or any Group company will be operating Relevant Business within the Territory if either Relevant Business is located or to be located within the Territory or it is conducted or to be conducted wholly or partly within the Territory.

14.3

Each sub-clause and part of such sub-clause of this clause 14 constitutes an entirely separate and independent restriction and does not operate to limit any other obligation owed by you, whether that obligation is express or implied by law. If any restriction is held to be invalid or unenforceable by a court of competent jurisdiction, it is intended and understood by the parties that such invalidity or unenforceability will not affect the remaining restrictions.

14.4

You acknowledge that the market in which [C] and its Group companies operate is highly competitive, that you will have access to sensitive commercial information, and that you are being given the opportunity to earn significant levels of remuneration whilst working for [C] on the understanding that in the future you will be bound by the provisions of this clause 14. In entering into this Contract, you acknowledge and accept [C’s] right to require you to comply with the provisions of this clause 14 and that it would be inequitable for you to have taken the benefit of the opportunity to earn significant remuneration by virtue of your employment with [C] without allowing [C] to protect its business – including its relationship with its customers, its goodwill and the stability of its workforce – after the termination of your employment by way of enforcement of these restrictions. You further acknowledge that you have no proprietary interest in any customer or prospective customer. You have been advised to seek independent legal advice if you have any doubts or concerns about the meaning and effect of these restrictions and/or the consequences to you of breaching them.

14.5

Before accepting any offer of employment either during your employment hereunder or during the continuance of the restrictions in this clause 14, you will immediately provide to the person making such offer a complete signed copy of this Contract."

The other provision of significance, it is said, to the argument advanced on behalf of D1 is clause 12.5 (which is referred to in clause 14.1 above). It reads as follows:

“12.5

If the Company wishes to terminate your employment or if you wish to leave its employment before the expiry of the notice in clause 2 and whether or not either party has given notice to the other under that clause, the Company may require you:

(a)

to perform duties not within your normal duties or special projects; or

(b)

not to attend for work for all or any part of the lawful notice being duly given under clause 2 or (if no such lawful notice has been duly given) for a period equivalent to the lawful notice which would have been required to be given by you to terminate the contract (and which shall expressly include any part of the term which is outstanding on the date the Company issues the instruction). For so long as you are not required to work during such period, you will remain an employee of the Company. You will continue to receive your salary and other contractual entitlements except for any bonus, and to be bound by all the terms of your employment. You will not directly or indirectly work for any person, have any contact with any customer of the Group or for business purposes, any such employee without the prior written agreement of the Managing Director or CEO. If you are not to attend for work under this clause, the Company shall be entitled to offset any outstanding accrued holiday due to you for each day of non-attendance.”

Clause 12.5(b) is a “garden leave” provision that C could invoke if it wished to do so in the circumstances prescribed. It is to be noted that there is no contractual provision by virtue of which any time D1 might have spent if put on “garden leave” was to be set off automatically against the period of the PTRs except for a day for day set off if more than three months of “garden leave” was implemented. It is submitted on his behalf that this is an important consideration in determining whether the PTRs are reasonable and enforceable. I will return to this argument in due course (see paragraphs 110-114 and 115-121), but the net effect of these contractual provisions is that if either party gave the requisite notice (90-120 days) during the Initial Term and C decided to place D1 on “garden leave” and enforce the PTRs in full, D1 would be “out of the market” for 9 months.

It is well-established that the reasonableness of a PTR is determined by reference to the circumstances of the parties at the time the contract of employment was concluded. In Gledhow Autoparts Ltd v Delaney [1965] 1 WLR 1366, Diplock LJ, as he then was, said this at p. 1375:

“The defendant was in fact employed for over six years by the plaintiffs and no doubt became a valuable servant and acquired considerable knowledge of and personal relation with the plaintiffs' customers. It is natural in those circumstances to tend to look at what in fact happened under the agreement. But the question of the validity of a covenant in restraint of trade has to be determined at the date at which the agreement was entered into and has to be determined in the light of what may happen under the agreement, although what may happen may cover many possibilities which in the result did not happen. A covenant of this kind is invalid ab initio or valid ab initio. There cannot come a moment at which it passes from the class of invalid into that of valid covenants.”

It is equally well-established that the onus is on the employer to establish that a PTR is reasonable in the interests of both parties and that it is designed to protect some proprietary interest of the employer for which the restraint is reasonably necessary: Chitty on Contracts, 32^nd ed., Vol. 1, paragraph 16-115.

It is common ground that Cox J spelt out accurately the three-stage process required for the consideration of a PTR in TFS Derivatives Ltd v Morgan [2004] EWHC 3181 (QB); [2005] I.R.L.R. 246. Having referred to the decision of the Court of Appeal in Office Angels v Rainer-Thomas [1991] I.R.L.R. 214, she said this:

“37.

Firstly, the court must decide what the covenant means when properly construed. Secondly, the court will consider whether the former employers have shown on the evidence that they have legitimate business interests requiring protection in relation to the employee's employment ….

38.

Thirdly, once the existence of legitimate protectable interests has been established, the covenant must be shown to be no wider than is reasonably necessary for the protection of those interests. Reasonable necessity is to be assessed from the perspective of reasonable persons in the position of the parties as at the date of the contract, having regard to the contractual provisions as a whole and to the factual matrix to which the contract would then realistically have been expected to apply.”

As Cox J also said at [39], “[even] if the covenant is held to be reasonable, the court will then finally decide whether, as a matter of discretion, the injunctive relief sought should in all the circumstances be granted, having regard, amongst other things, to its reasonableness as at the time of trial.” Nonetheless, the first line of attack of D in this case is to question the validity of the PTRs and, accordingly, they must initially be subjected to the scrutiny embraced within the three-stage process referred to.

The first issue is determined by the appropriate canons of contractual construction. The second is a matter of fact or, perhaps, a mixed question of fact and law. One feature of the process by which the first issue is determined is the principle that if a particular construction of a PTR “was to lead to the view that the clause was unenforceable, then an alternative view, which did not lead to the same result if legitimate, ought to be preferred”: per Waller LJ in Turner v Commonwealth and British Minerals Ltd [2000] IRLR 114 at [14]. As Cox J said at [44] in TFS Derivatives –

“I accept [the] submission that if, having examined the restrictive covenant in the context of the relevant factual matrix, the court concludes that there is an element of ambiguity and that there are two possible constructions of the covenant, one of which would lead to a conclusion that it was in unreasonable restraint of trade and unlawful, but the other would lead to the opposite result, then the court should adopt the latter construction on the basis that the parties are to be deemed to have intended their bargain to be lawful and not to offend against the public interest.”

The evaluation by the court of the third of these issues must be approached in a broad, common sense way. In Stenhouse (Australia) Ltd v Phillips [1974] AC 391, PC, Lord Wilberforce said this at p. 402:

“First, the evidence was … directed to the wrong point. The question is not how long the employee could be expected to enjoy, by virtue of his employment, a competitive edge over others seeking the clients' business. It is, rather, what is a reasonable time during which the employer is entitled to protection against solicitation of clients with whom the employee had contact and influence during employment and who were not bound to the employer by contract or by stability of association. This question, secondly, their Lordships do not consider can advantageously form the subject of direct evidence. It is for the judge, after informing himself as fully as he can of the facts and circumstances relating to the employer's business, the nature of the employer's interest to be protected, and the likely effect on this of solicitation, to decide whether the contractual period is reasonable or not. An opinion as to the reasonableness of elements of it, particularly of the time during which it is to run, can seldom be precise, and can only be formed on a broad and common sense view. On this matter, while accepting much of the judge's reasoning, their Lordships come to the conclusion that the restraint, regard being had to the field in which it was designed to operate, was reasonable and should be upheld.”

An illuminating illustration of the correct approach to this third feature is to be found in the decision of the Court of Appeal in Beckett Investment Management Group Ltd and others v Hall and others [2007] I.C.R. 1539. The two defendants had worked for the claimant financial services company as independent financial advisers. Under covenants in their contracts of employment with the claimant company they were restrained, for 12 months after the termination of their contracts of employment, from supplying advice to any “client” of “the company” of a type provided by “the company” in the ordinary course of business. The judge held, inter alia, that “the period of 12 months for which the restraint was sought was in fact purely arbitrary” and that he “would have thought that three months would have been adequate for that purpose.”

At [29], Maurice Kay LJ, with whom Sir Anthony Clarke MR and Carnwath LJ agreed, said this:

“In my judgment, the judge adopted an unrealistic and erroneous approach to the question of duration. He considered the period of 12 months to be “purely arbitrary” but it was only arbitrary in the sense that any fixed duration bears an element of arbitrariness. His three-month rationale is to my mind simplistic in so far as it addresses the relationship between the claimants and the clients but is deficient in having no regard to what [the claimants] would need to do to persuade clients to remain loyal. [The defendants] were not run of the mill, expendable employees. They were of enormous importance to the success of the [relevant] office. To have any prospect of retaining the clientele, [the claimants] would need to recruit, organise, train and project suitable replacements. On any basis, this was an important aspect of the reasonable protection of their legitimate business interests. However, it was ignored by the judge who chose instead to attach significance to the fact that a non-dealing clause would prevent a client from doing business with someone in whom he had confidence for a period which the judge considered to be too long. It is apparent from the solicitor cases that a non-dealing clause may be valid notwithstanding the potential interference with the client's choice as to whom to instruct and the degree of confidence which exists between client and solicitor …. During the period of restriction the client is not compelled to remain with the covenantee. If he cannot await the expiration of the period of restriction he can in the meantime seek the advice of any service provider with which the covenantor is unconnected. For these reasons I consider that the confinement of reasonableness to a period of three months was wrong. Whilst I do not consider that a period in excess of 12 months would have been reasonable in respect of either [the defendants], I am prepared to hold that 12 months was a reasonable period in both cases. In reaching this conclusion I have specific regard to their seniority and importance, to the evidence about business patterns, to the logistics of replacing them, and to the uncontradicted evidence of an industry standard of 12 months. In my judgment, a non-dealing clause for 12 months was reasonable between the parties and reasonable in the interests of the public.”

It is axiomatic that each case is fact-specific. It is important to emphasise this proposition because I have been much pressed by what has or has not been held acceptable in other cases and what it is said to be current “industry practice” in the IDB field. Whilst it is helpful to have some appreciation of these matters and, as the judgment of Maurice Kay LJ indicates, uncontradicted evidence of an “industry standard” may be of relevance as a factor to be considered, they are not determinative of the issue in any specific case. It is to be noted that one factor said to be relevant in determining the length of the covenant in that case was what the employer “would need to do to persuade clients to remain loyal”. Elsewhere in this judgment I use the expression “shore up” client contacts. It is intended to mean the same thing.

Before I consider the background facts in more detail, I should refer briefly to what I described above (see paragraph 5) as “the Trayport facility”. At one stage it was suggested on behalf of D that the facility substantially dilutes the importance of client information as an element of confidential information in this context. Although that was suggested, Mr Jonathan Cohen QC for D said nothing about Trayport in his oral closing submissions and, although mentioned in the written submissions, Trayport was not being put forward on D’s side as something that had transformed the openness of the IDB world in the power market. It is not disputed that some knowledge is more readily accessible as a result of this facility, but the question is how much and what difference, if any, does it make to what is generally regarded as confidential in this area?

Mr Anderson (see paragraph 33 below) described the background and the distinction between “voice broking” and trading on an online system in his witness statement as follows:

“Historically, IDBs provided only a “voice broking” service, by which almost all trades were concluded by brokers speaking to clients and counterparties by telephone (through the telephone lines on the “dealer board” or “squawk box”). In recent years, there has been growth in “electronic broking”, in which traders place orders on an online system such as the “Trayport” system. Today, the service [C] offers is known as “hybrid” broking, in which we service clients both by phone and electronically, to create the biggest possible liquidity pool. To be clear, therefore, the electronic service we offer is not “automatic” – rather, our brokers work with clients and counterparties by phone and instant message to match trades that can then be closed on the “screen” (ie. electronically, through Trayport).”

He added this observation later:

“… the recent history of these markets has made client relationships more important than historically, rather than less so. First, the advent of electronic systems such as Trayport has made it easier for smaller brokers to gain a foothold in the market, in that they see all those counterparties and prices that clients choose to display (which is not, by any means, the entire market, but is a good starting point). In cases where the clients wish to deal at the prices “on screen”, they need to nominate a broker. The decision which broker to nominate will generally come down to the relationship with the broker. A trader is very unlikely to nominate a broker with whom he/she does not have such a relationship.”

Although Mr Anderson gave that evidence in written form, he did effectively say that others around (and I imagine he was speaking of Mr D’Aniello: see paragraphs 40-43 below) knew rather more than him about Trayport. Mr D’Aniello, in responding to something in the Defence, said this:

“… [D1] suggests that client transactions are displayed transparently on Trayport. That is wrong. On Trayport, we see only our clients’ bid offer/sell price. We cannot see what ICAP (for example) or BGC or Marex see. Equally, we cannot see the full details of a transaction brokered by one of our competitors, and certainly not the margin.”

As I understood the evidence of Mr O’Reilly (see paragraph 60 below), it was to the effect that an individual broker can see the products which his/her IDB’s clients are offering to buy or sell on the brokers’ section of Trayport. He/she can also see the prices and volumes on offer. They can also see the same information about completed trades, as well as the names of the counterparties for the trades that were assigned to their IDB. However, they cannot see this information in respect of trades assigned to other IDBs.

Mr Anderson said that the results of voice-brokered deals are not necessarily entered on Trayport and orders given exclusively to certain brokers are not entered either. There are deals that are dealt with anonymously which would not appear on Trayport.

I cannot pretend that I found the evidence about what can and cannot be deduced by any IDB that subscribes to Trayport from what is available to be seen on it easy to follow. Generally, in this case I prefer the evidence of Mr Anderson and Mr D’Aniello to that of Mr O’Reilly (see paragraph 60 below), Mr Elliott and D1 and to the extent that there are differences about what can be deduced from Trayport I prefer what Mr Anderson and Mr D’Aniello say. The best conclusion to which I can come is that Trayport does not give a full insight into the market, though it gives some, but not sufficient to displace the need for close personal and professional relationships between brokers and clients and the need to keep confidential those relationships so far as possible.

I will endeavour to summarise relevant parts of the background and the evidence. However, it must be understood that this was a speedy trial in which, following such disclosure as there was, there was less opportunity for the parties to review their respective positions in the light of it than might otherwise have been the case and to digest the consequences of that disclosure. Equally, the parties have been anxious to obtain a relatively speedy judgment. Since I received written closing submissions on behalf of D running to 86 pages and for C of 66 pages and it has been necessary to review 5 days of transcripts, a significant number of documents and several authorities, it will be appreciated that there have been potentially a large number of issues to address in a short space of time. I need to be selective and I propose to focus on those that seem to me to be most relevant.

Mr Michael Anderson is CEO of C (and has been since mid-2014) and has been co-head of the London operations of the Tradition Group since late 2016. In his witness statement, he says that C is a subsidiary of Compagnie Financière Tradition, “one of the world's top three brokers in financial and commodity-related products”, which has been listed on the Swiss stock exchange since 1973. He says that the group has a worldwide network of offices, with a presence in 28 countries, the London office being the largest of its operations internationally where there is a broking floor of approximately 600 brokers. He has been involved in broking for about 27 years and has worked for C for 16 years.

Having spent 5 years in the USA until August 2007 he returned to the UK to run the European Energy and Commodities business and C’s oil business globally. He says that the European Energy and Commodities business grew very significantly over the following years with “around 20 brokers in 2007 to more than 100 brokers today, in three cities across Europe.”

As a general observation, he says that he has recruited many brokers during his time with C and has had to deal with “the fall-out when brokers leave us to move to a competing IDB.” He says that disputes such as the present dispute are rare and only on a few occasions has he “had to authorise a claim against a departing employee for breach of their restrictive covenants.” Most of those occasions were resolved quickly, he said, “once the other parties had taken legal advice.” He believes that the case dealt with by Cox J (see paragraph 18 above) is the only case where C has been forced to go to court in England to obtain an order to enforce restrictions in a broker’s contract of employment.

He referred in his witness statement to D as one of “the weaker brokers in this area”. I doubt that they would see themselves in that way, but I did not get the impression that they would claim to put themselves in the “Tradition league” in terms of the overall size of the IDB operation. Mr Jeremy Elliott, who has been Chief Operating Officer for the D’s energy business since September 2013 and Joint Head of Energy since August 2014, is one of two Managing Directors for Energy. His assessment is that D “has an average 20% share of the Euro power markets” and that its share of the Italian power market in June 2016 was, at 11%, some 6% less than C’s share (cf. paragraph 60 below).

I will return to aspects of the business of each side in this dispute below, but Mr Elliott says that “[it] is common to try to reach an agreement with a rival IDB about when an employee will be released” and that “particularly for a junior employee often IDBs are sensible about these issues.” This reflects to some extent what Mr Anderson said (see paragraph 35 above), but Mr Elliott asserts that C was “not prepared to be reasonable.” The validity of that assertion does, of course, depend on what is “reasonable” in this context.

D1 was aged 26 when he became a trainee broker with C in September 2013. He had studied business and administration at the University of Verona between 2007/8 and 2011, completing his degree in November 2011. From November 2011 to March 2012 he studied for and obtained an Executive Master’s degree in private banking at the Captha School of Banking and Finance in Milan. He then studied for and obtained a Master’s degree in Finance at Fondazione at the CUOA Foundation, a business school in Altavilla Vicentina, from June 2012 to January 2013. He moved to London in June 2013 as he thought that it offered better prospects in the financial sector. In addition to his native language of Italian (and, of course, English), he spoke Spanish also.

D makes a point about the PTRs in his contract as a trainee broker so I should refer to them briefly. The provision as to notice is identical to the provision set out in paragraph 11 above for the junior broker contract and the provisions relating to confidentiality and company property are also as set out in paragraph 12 above. Equally, the “garden leave” provision is the same as in the junior broker contract, with the limited set off as referred to in paragraphs 13 and 14 above. The effect of these provisions is characterised by Mr Cohen as “extraordinary” and mean that if D1 had given the minimum three months’ notice required to terminate his trainee broker contract, C “enjoyed the contractual power to keep him out of the market for as long a period as he had worked.” He submits that this provides valuable evidence of C’s approach to its PTRs which is one that does not “carefully tailor levels of restraint to the seniority and circumstances of its brokers”. Whilst I can see the forensic force of the point, I do not think it adds to or subtracts from the straightforward process of interpreting the PTRs in the usual way.

When he joined C as a trainee broker, as indicated above (paragraph 6), D1 was assigned to the “Italian power desk”. He joined three established brokers, namely, Filiberto D’Aniello, Placida Di Crescenzo, and William Gabardi. Mr D’Aniello had worked for C since June 2009 and was promoted to Desk Head on the Italian power desk in the summer of 2016. He reports to Mr Jason Curtis, the Manager for East European and Italian Power, who in turn reports to Mr Anderson.

At the time C wanted to recruit a trainee broker to assist with the Spanish market as well as working on Italian power and, ideally, it wanted a candidate who was Italian and able to speak Spanish. D1 fitted that bill, impressed at interview and, despite having no broking experience, was offered the position. His starting salary was £28,000 p.a., together with the possibility of a discretionary bonus depending on the performance of the desk. D1 describes the salary as a “very small amount of money in the context of this industry” which is almost certainly true. However, the obvious observation is that everyone must start somewhere and many highly qualified and talented young people nowadays are pleased simply to get a foot on the ladder and that the initial starting salary is not the prime consideration. It is common ground that he (like all trainees) started doing the “back office” administrative work before playing any active part on the trading desk. There is a dispute about how much broking he did during his first year: his evidence is that after a couple of months, he was also allowed to start trading for Spanish power clients and was given “a couple of small Spanish clients and asked to try to develop them.” He said that the Spanish power market was small and the level of activity and the volume of trades from these clients was very low with the result that he spent most of his time on back office tasks. That position continued, he said, until a period shortly before his promotion to Junior Broker when he “was introduced to a number of Mr Gabardi’s smaller Italian power clients” with whom he started to deal. (His promotion came in the wake of Mr Gabardi’s move to C’s Italian gas desk in Rome in October 2014.) After the present dispute arose, D’s solicitors asserted in a letter dated 10 January 2017 that D1 “had no client facing duties” during his trainee year and that his role was “confined to ‘back office’ operations”.

I did not understand D1 to continue fully to support this assertion in his evidence and, for my part, would have thought it intrinsically unlikely given that C wanted him to develop as quickly as possible into an effective broker. Indeed, there is an internal email dated 18 March 2014, at or about the time D1’s probationary period was coming to an end, in which Mr D’Aniello is quoted as saying that D1 should be told that he “needs to be louder and more extrovert with customers”, a comment that would have been unlikely if D1 had not had any worthwhile opportunity to work with customers. As I shall observe later, it seems quite clear that he heeded this advice.

I am not really persuaded that what occurred during D1’s trainee period has any true relevance to the issues that I must consider. However, I have sensed in this (and indeed other) evidence an attempt by or on D1’s behalf to minimise his role with C and to suggest that his exposure to customers was not particularly great throughout the whole of his time there. This attempt is, in my judgment, borne of a desire to demonstrate that the PTRs are unreasonable for someone of his status. Whether the PTRs are or are not intrinsically unreasonable as a matter of law will not be determined by reference to evidence of this nature. To the extent that it matters, I generally prefer Mr D’Aniello’s perception of what it was that D1 did during his trainee year. Mr D’Aniellio was undoubtedly and understandably loyal to C, but I thought not the kind of person who would take too much nonsense from anyone. He would have spoken his mind had he felt it right to do so. Indeed, he said during his cross-examination that D1 deserved a better appraisal in December 2014 than the one to which I will refer below (see paragraph 52).

As already foreshadowed, Mr Gabardi’s move to Rome left a gap on the Italian desk and D1 was invited to fill it. Both Mr D’Aniello and Mr Anderson considered that he was up to the task, even if there was still progress to be made. In his witness statement, Mr Anderson said this:

“I could see myself, by the autumn of 2014, that [D1] had a good, easy manner with clients and that he was starting to develop relationships in the way I would expect. That was also the feedback I received from his colleagues on the desk. Mr D’Aniello and Ms Placida Di Crescenzo were satisfied with [D1’s] performance as a trainee, and considered that he would be a profitable addition to the desk as a whole. He had obvious aptitude. His strength was that clients liked him, and wanted to speak and deal with him.”

D1 said this in his witness statement:

“I was simply delighted to be offered the position of Junior Broker by the Claimant. It was my first proper job (other than my traineeship) which I had obtained since completing my formal education. I also felt I had been lucky that a role had opened up at the right time.”

He commented that the new salary (£40,000 with no guaranteed bonuses) was “modest for the industry”, but that he was happy with it because it was consistent with his role as a junior broker and the fact that he was just starting out in his career. He said that his plan was “to work hard and try to develop a client base” which he knew “would take some time” as he was just starting out. I am sure that was so and it means that he (subjectively) was looking to a long term relationship with C. Objectively, it would be in the interests of both him and C to start from the premise that the likelihood was that he would make rapid progress and that at least at the end of the Initial Term would justify being considered for a Subsequent Term or Subsequent Terms. I will return to the significance of this later (see paragraph 118).

As indicated above (see paragraph 16), it is at the point he started in his role as junior broker that the PTRs in his new contract are to be judged for their validity. D1 says that he “did not read [the contract] in detail”, assumed the terms were “standard” and that it did not occur to him to take legal advice. He does not say that he was unaware of the PTRs so I assume that he read them and thought they were “standard”. Not reading a contract in detail is ordinarily no answer to its otherwise binding nature and no suggestion has been made that he is not bound by them for that reason, but Mr Cohen submits that D1 “enjoyed no negotiation power and was extraordinarily vulnerable to abusive contractual terms” and that this is a factor I need to take into account. Again, I will return to this when I consider the effect of the PTRs, but it is to be noted that it would be unusual for someone in D1’s position to take legal advice: cf. Patsystems v Neilly [2012] IRLR 979, per Underhill J, as he then was, at [36]-[38].

As I have said, the validity or otherwise of the PTRs crystallised at this point. Subsequent events are, as it seems to me, only truly relevant to the exercise of the discretion reposed in the court if the PTRs are valid although those events can, one supposes, throw some light on the realities of the market in which the PTRs have been agreed and on the position of D1 generally.

Whatever the relevance of the post-contract facts, there was a good deal of focus on them in the evidence deployed at the trial. I will endeavour to summarise them and make such findings as appear to have some relevance to the issues.

From C’s perspective D1 started as a junior broker on the basis of the assessments set out in paragraph 44 above and he set out to achieve the objectives identified in paragraph 45 above. Mr D’Aniello and Ms Di Crescenzo were, of course, the experienced brokers on the desk and it would have been unrealistic for either side to expect that D1 would immediately find himself (or work himself) into their league. However, there would have been a joint incentive between him and C to get him moving forward as quickly as possible. There seems to be an issue about what D1 did or, as he would suggest, was effectively permitted to do during much of the period until he tendered his resignation in July 2016. His case was that a large proportion of his working day was still spent doing the back office tasks that he had undertaken as a trainee. Indeed he went on to suggest that they “would take up to, on average, around 4 hours of [his] working time every day.” He said that he was often asked by Mr D’Aniello and Ms Di Crescenzo to record trades they had brokered by adding the necessary information “including counterparty codes, price, product, quantity and time, to Trayport to execute the trade.” It is, I should say, common ground that this is an important part of the job of a broker and plainly someone had to do it even if the broker responsible for the trade was too busy to do so. He seemed to suggest that it was regularly his task to go out and buy the lunch for his two more established colleagues.

I sensed that he backtracked somewhat on his assertion about the back office work when he was cross-examined, recognising that he was “multi-tasking”, though Mr Cohen made detailed submissions in support of this case in his written Closing Submissions. It is possible that a close examination of all the written material generated during the relevant period might (but only might) give a clearer picture than the current recollections of those involved in the frenetic environment of a busy desk, but I rather doubt it. The need for a speedy trial has not afforded a proper opportunity for that kind of examination. A rather broader view needs to be taken which I am quite certain will suffice for present purposes.

I have no doubt that, as the most recent addition as a broker to the desk, D1 was expected to do some of the more menial tasks, certainly in the initial stages, as well as beginning to build up experience and expertise in broking itself. I am sure there were occasions when he did indeed perform some of the back office tasks for Mr D’Aniello and Ms Di Crescenzo and indeed Mr D’Aniello did not deny that this occurred. However, he was unprepared to accept that it would have occupied D1 for as long each day as he suggested and that seems to be borne out by other evidence. For example, his first appraisal in early December 2014 (about 2 months in to his new role) is somewhat mixed. He was said to “need improvement” in familiarity with desk products, methods of trading and the marketplace (all features of “broking”) and also that improvement was needed in “desk contribution”. However, his punctuality was “excellent” and his professionalism, client manner and general attitude and compliance with the corporate culture were said to be “good”. The comment of his Desk Manager (Mr Jason Curtis) was as follows:

“This is Andrea’s big opportunity to prove he can make it as a broker now that Will Gabardi has left. The desk needs him to step up and raise his game very quickly, as the market is becoming extremely tough. His admin work is very good, however this will not be enough. Andrea’s targets are to develop his existing lines in Spain and his new customers in Italy as soon as possible, to take on more responsibility to help his colleagues.”

Moving forward by 15 months, he was assessed as “very good” in each of the above areas and was only reduced to “very good” from “excellent” in respect of punctuality. The comment of Mr Curtis was as follows:

“Andrea is firmly part of the team. This is a good development. Spain however is a problem. However broker volumes have decreased there across the market. Some recovery of Spanish business would be positive.”

It would seem clear that he had raised his game and had become “firmly part of the team”. He could hardly have been assessed as “very good” in all aspects of broking and in respect of client manner unless he had a good deal of client contact. Perhaps by not scoring “excellent” he was assessed not yet to be the finished product, but this was a real step forward within about 18 months of his formal appointment to a broking position. As will be seen below, his development and potential was seen by D2 as something worth pursuing within a few months of this assessment. How could this have been achieved if there had not been a significant degree of client-facing responsibility? The communications that have been revealed with some of his clients after his decision to leave C (to which I will refer below) indicate that he had formed a close bond with them.

Shortly before the formal assessment in early 2016 referred to in paragraphs 53 and 54 above D1 had requested an increase in his basic salary which Mr Anderson said that he was willing to countenance “given his strong progress”. It was increased to £60,000 p.a. from £40,000 p.a. with effect from 1 January 2016. (Incidentally, Mr Elliott expressed the view to D1 in a WhatsApp exchange in early June 2016, when they were in discussions about his possible move to D2, that £60,000 p.a. was “a good salary here”.) As is plain, bonuses play a very important part on the overall remuneration of a broker. D1’s bonus payments after he became a junior broker were as follows:

February 2015 (Quarter 4) £20,000

May 2015 (Quarter 1) £20,000

August 2015 (Quarter 2) £10,000

November 2015 (Quarter 3) £15,000

February 2016 (Quarter 4) £35,000

May 2016 (Quarter 1) £25,000

I should observe, incidentally, that in the same series of WhatsApp exchanges to which I referred in paragraph 55 above D1 said the following:

“I don’t think I would move for the same salary:

My contract will expire soon and I will have a payraise if I stay there. We have 26% mkt share in Italy, which means at the moment we are the best, you are around 7% which is approximately the mkt share I cover with my clients now.

I know I will get more commissions from the other mkt, and that’s why I have been talking to you, but I am in a good place, we are nr1, many counterparties take out closing numbers as a benchmark.

Plus if they are not gonna let me work for six months I will lose the two biggest bonuses I get.

Let me know what you think, maybe we should meet this week and speak 1 to 1 about it.”

This reveals his view that C was “Number 1”, at least in the Italian power market, his perception of the proportion of that market that he was dealing with personally (7% out of a total of 26%), his belief that the next two bonuses that would be payable if he remained with C would be “the two biggest bonuses” he would get and that if he stayed he would get a salary increase when his contract was renewed. If he had stayed with C - and assuming (contrary to his expressed and presumably legitimate expectation) that he received only the same bonus in August 2016 as he received for the same quarter in 2015 – he would have grossed over £140,000 for the 12 months from 1 November 2015. If, as Mr Elliott presumed (see paragraph 62 below), his bonus in August 2016 was to be £25,000, he would have grossed over £155,000 in that period.

He was, of course, receiving bonuses that were significantly less than his two more experienced and long-serving colleagues on the desk, but that may be thought to be hardly surprising - although in a conversation with Ms Katerina Labanicova of D2 on 30 August 2016 he was damning about the way they had treated him, including their influence on his bonus, and said that he would “really enjoy f…ing [their] market share”. At all events, there is nothing in all this evidence that justifies the proposition that he was significantly confined to back office, non-client-facing work or, perhaps more importantly, that he had no substantial exposure to what can fairly be described as the confidential aspects of C’s business (see further at paragraph 87 et seq below), whether in active, direct broking or by way of simply being part of the team as he was assessed to be (see paragraph 53 above). He was expected to edit trade details and perform back office tasks. Inevitably, he would have knowledge of client/counterparty relations even if he was not directly active in brokering the transactions. There would be little that was happening on the desk of which he would not have been aware.

I am firmly of the view, on the evidence to which I have already referred, that the attempt to downplay D1’s role during the first 18 months of his contract as a junior broker has misfired. It is possible that he was impatient for more rapid progress than he thought was his entitlement: that is a perfectly understandable position for a young, ambitious person to take, and it may be that he thought that he was not being given sufficient responsibilities with the larger clients of C. But to suggest, as it seemed to be suggested, that he was effectively side-lined from “front line”, client-facing activities misrepresents the position. In any event, the most significant consideration for present purposes is the extent to which he was exposed to, and thus became armed with the capability to digest and remember, the confidential material that was important to C’s business including, most particularly, client contacts. I will refer to that consideration in due course.

His desire to move forward and earn more undoubtedly operated on his mind when he was approached on behalf of D2 to see if he was interested in moving. The recruitment process of D1 to D2 is of some significance. Mr Matthew O’Reilly, who had worked with D2 since 2001, was promoted to Head of the Europe Power Desk in May 2016. He wanted to improve D2’s market share in the Italian power industry because he felt it was an area of D2’s operations that needed expansion. I note that in an email to a colleague in June 2016 Mr Elliott described D2 as an “also ran” in the Italian market at that time. Mr O’Reilly asked a couple of his own “first cover” clients active in the Italian market if they could identify any good candidate. One such client (that I will refer to simply as ‘X’) mentioned D1. Through this source Mr O’Reilly obtained D1’s contact details and they met in early May. Mr O’Reilly formed a favourable view of D1 and wanted to pursue the possibility of him joining D2.

The next step was a meeting with Mr Elliott that took place in early June. He was persuaded that D2 should try to obtain D1 and various discussions, mostly by email or by telephone, took place over the next week or so. D1 supplied Mr Elliott with his current contract of employment which, of course, contained the terms the subject of the contest in these proceedings. Mr Elliott and the human relations personnel at D2 noted (in an email exchange on 6 June 2016) that D1 was free to resign with effect from 1 November 2016 with six months’ restrictions from the termination date. It is, perhaps, not without significance to note that there is no immediate element of surprise about this in the email exchange and no reference to the absence of a set off for time spent on garden leave. The only comment made about the garden leave provision was that of the HR representative who noted that the period of restrictions might be “reduced slightly if he is placed on garden leave for more than three months.”

Mr Elliott thought at one stage in June 2016 that D2 might have to pay D1 a “sign on” fee of £100,000 to compensate him for his time out of the market though the “target” might be £80,000. In fact, he was only paid £40,000. The figure of £100,000 would seem to have been calculated on the basis that D1 could not start with D2 until 1 May 2017 because Mr Elliott said this in his witness statement:

“If [D1] would have earned bonuses of £25,000 each quarter, and is kept out of the market until May 2017 (so into Q2), he will have lost out on £100,000.”

In his witness statement Mr Elliott continued thus:

“The £40,000 sign on he received from [D2] of course only goes a small way towards compensating for such a significant loss. That leaves him at a very substantial disadvantage and of course [D1], unlike a more senior broker, has not had the advantage of larger bonuses (and a higher salary) over a long period to fall back on. The financial impact upon him is therefore very substantial and in my view entirely unjustified given his status at Tradition as a junior broker.”

He was not asked about the contrast between the apparent equanimity with which he personally countenanced a “sign on” compensatory fee of £80-100,000 for D1 in June 2016 and the “entirely unjustified” disadvantage that C’s insistence on the maintenance of the PTRs has caused him. However, Mr Elliott’s failure to comment on the iniquity of the position when first confronted with D1’s contract with C is somewhat telling. It does not appear that the thought on the part of those from D2 who were advising D1 of maintaining that he could start with D2 in January 2017 emerged until 23 August 2016 when it was suggested to Mr Elliott by the Head of Group Human Resources, Yvonne Poole. I will return to that below (see paragraphs 76-77), but by the end of June a “package” had been agreed between D1 and D2 (which involved a “sign on” fee of £40,000) which led to D1 to telling Mr Anderson on Friday, 1 July 2016 that he was resigning and going to work for D2. He worked for another week (until 8 July) and then took holiday leave for the next two weeks, returning on Monday, 25 July.

At or about the time D1 was to give his notice to C, Mr Elliott advised him to inform his clients that he was leaving C before he left on holiday. His justification for this advice, as set out in his witness statement, was as follows:

“I expected that [D1] would not be permitted to trade when he returned from holiday. With this in mind, I advised [D1] to inform his key clients about his resignation before he went on holiday. I thought it might be the last opportunity he had to do that.”

When pressed about this in cross-examination, he said that he suggested D1 should speak to his customers “as a courtesy” and denied the suggestion put to him by Mr Daniel Oudkerk QC, for C, that he did so to preserve the relationships so that he could bring them to D2. I regret to say that I did not find this denial convincing, particularly when judged by reference to a WhatsApp exchange on 25 July (see paragraph 71 below) and by the events referred to in paragraphs 81-86 below.

By the time he attended for work on 25 July Mr Anderson was away on holiday and he intended to speak to D1 again on his return from holiday on 15 August. He had given instructions to the HR department to send D1 a letter confirming the position (see paragraph 74 below), but that it should not be sent until his return. He had decided not to put D1 on “garden leave”. He explained this decision as follows in his witness statement:

“We considered whether to put [D1] on garden leave at this stage, to keep him “out of the market”. We could not afford to do so, however. We needed a third person on the Italian desk; we could not serve the desk’s customers, and keep up to date with confirmations and similar, with two brokers alone. Whilst we moved to recruit a new trainee, we needed a fluent Italian speaker (given the nature of the desk’s client base), which slowed the process down ….

I decided that the best course was to keep [D1] on the desk, but to restrict so far as possible his direct dealings with clients, so as to avoid strengthening his client relationships any further. He was to focus on providing support for the other brokers, keeping the desk up to date in terms of trade confirmations and similar, and on training [his replacement who started in early October 2016]. This was far from ideal, but it was the only option open to us at the time.”

His oral evidence was to the same effect:

“My position is, we considered our options, and there is an obvious temptation … not have somebody working there who has resigned, but it is a small desk of three people. He was essential on that desk. We needed him there. So, our only option was to keep him.”

Mr Anderson’s evidence was that there is no invariable practice in the industry that a broker who resigns will be put on garden leave, although generally that might be the preferred option.

When D1 returned to work he found that his means of access to clients had been removed. That indeed had been arranged. Mr D’Aniello said that he did “not want him placing trades for our clients.” D1 was effectively put on back office and research duties.

He sent a WhatsApp message to Mr Elliott telling him that C did not want him to speak to any clients. In reply Mr Elliott asked -

“What did your customers say when you spoke to them?

[D1]: “They were happy for me, it was actually pleaseant [sic] seeing how they supported this change. they said they will miss me and that they are really happy that I’ll be back soon. Some of them said they won’t work anymore with TFS.

Mr Elliott: That sounds positive

[D1]: Yes, I left for the holidays in a good mood! They shut me down this morning and they realised it so they are texting me on WhatsApp, hopefully with the situation they have created in here I can start earlier with you! Will be fantastic.”

Mr Elliott denied that his reply “[that] sounds positive” was in response to the news that some of D1’s clients said that they would not work with C any more. It is, of course, important not to form a view of this kind of interchange on the basis of some fine linguistic analysis, but I am afraid that I cannot accept that it was directed to everything other than the suggestion that some of D1’s clients would go elsewhere in future. The denial does not sit comfortably with the avowed intent of D2 to increase its Italian market share as is evidenced by some of the other actions that took place (see paragraphs 81-86 below). Mr Elliott also commented that it would be difficult for C to keep D1 away from his customers whilst still working and then “have the full six months after that”.

Having gone back to work on 25 July D1 wanted to know the basis upon which he was to continue with C until 31 October, but on Mr Anderson’s insistence he had to await Mr Anderson’s return from holiday. On that return he was sent the letter that had been prepared on 18 July.

It was from Kay Burke, Head of HR at C, who wrote to him reminding him that the last working day for C would be 31 October 2016, that he would no longer be entitled to bonus payments whilst under notice and that during his “notice period and afterwards” he was “bound by all the terms and conditions of [his] employment including [his] duties of confidentiality”. He was reminded that he must not “disclose any trade secret or confidential information belonging to or relating to any Group company which [he had] obtained during [his] employment, including but not limited to details of actual and potential customers, suppliers trade agents”. It was further emphasised that following the termination of his employment, he would continue to be bound by the “restrictions set out in paragraph 14.1(a)-(f) of the Employment Contract” (see paragraph 13 above). The letter concluded as follows:

“For the avoidance of doubt, this means you are not free to work for a competitor until 1st May 2017.”

He undoubtedly (and understandably) had found the period since 25 July very tedious and frustrating and (on D2’s advice) he wrote to Ms Burke (copying in Mr Anderson) in an email on 22 August (referring to the letter of 18 July) in these terms:

“Following my resignation, I was fully prepared to abide by the terms of my contract and continue working in my capacity as a broker until my contractual end date of 31 October 2016. However, on my return from annual leave on 25 July 2016, I was informed that I was no longer working in a broker capacity. I was advised I was not allowed to speak with clients, my systems access was changed, my desk was moved and my role became 100% focussed on back office duties all of which has resulted in me being totally withheld from the clients and the market. The last trade I completed was on 8 July 2016, the day before I went on holiday.

…

I am writing to respectfully request that we mutually agree a reasonable approach around my restrictions as following my change in role and duties; I will have been unable to speak with clients for a period of approximately 4 months from 8 July to 31 October.”

This was rejected by C and it was against that background that Ms Poole gave her advice to Mr Elliott on 23 August (see paragraph 64 above). The date of 1 January 2017 was, she said, 6 months from when D1 resigned which could reasonably be argued had kept him away “from his clients/the market/bonus earnings for six months (therefore reasonably meeting his current terms).” She said that D2 could “manage any kickback from [C] in 2017.”

Whilst Ms Poole’s advice does not say expressly that C should not be alerted to the proposal that D1 should start in January 2017, it was implicit in her “kickback” comment and it seems to have been the impetus for the veil of secrecy drawn thereafter over D1’s intentions. On 1 September 2016 D1 had a meeting with Mr Elliott at D2’s premises. Mr Elliott did not mention the meeting (or the plan) in his witness statement, but accepted in his evidence that he was party to the plan given the terms of a message from D1 to Mr O’Reilly on 2 September 2016:

“…yesterday meeting was good so we have decided that I will start in January as you were saying, but we would keep it quiet, so they won’t suspect anything and they won’t have time to prepare any injunction, then we will see how their reaction”

There are other features of what D1, in some cases with the encouragement of Mr Elliott and Mr O’Reilly, had been doing (and continued to do) in the meantime, to which I will return below, but I can take the next part of the chronology shortly. D1 remained with C until 19 October when he left. He had some outstanding holiday entitlement which meant that he did not have to continue going in to C’s premises until 31 October. His departure was amicable on both sides, there was a drinks party for him given by C and Mr Anderson asked him to say “hello” to Mr Elliott.

He gave C no indication that he was intending to start with D2 in January 2017, the assumption on the part of those at C who knew him being that he was going travelling and taking some time out before starting in the following May. I recited in summary form in paragraph 7 above what happened when this was discovered by C.

I have already drawn attention to the actions suggested by Mr Elliott in relation to D1 informing his clients that he was leaving (see paragraph 65 above).

The following WhatsApp and email exchanges between Mr O’Reilly and D1 over the period of Friday, 29 July, to Monday, 1 August, speak for themselves:

WhatsApp

Saturday 29 July 2016 starting at 21.34

O’Reilly: Hi mate good to see you yesterday

Please find a current list

Let me know who else we need when you have time

D1: Ciao Matt, I’ll take a look

I’ve already seen that we don’t have someone

I’ll get back to you on Monday

O’Reilly: Cool I’m sure there are a lot

Monday, 1 August 2016 starting at 15.08

D1: Good afternoon Matt, I worked on the list this weekend, and I’ve already 15+ counterparties to add, I’ll do a spreadsheet at home and send it to you can you please give me your email?

O’Reilly: Afternoon mate

You are a gentleman great work

My email is [private email address given]

Email

Monday 1 August 2016 starting at 19.03

D1: Hello Matt, Ive quickly done a first spreadsheet where you can find some entities that where (sic) missing in the list you sent me last week, i would say to be patient and wait a couple of weeks at least before contact them, i would like to sort out my position there before and, anyway, its august, most of them will be on holiday.

There are one or two new clients that they are trying to onboard, i will come with an updated version of the list during the week.

Hope it helps, let me know if you need anything else,”

As will be apparent from the text of that email, a list was attached. It was headed “new counterparties” and listed 21 counterparties with the name of the trader for each given. It also contained certain notes indicating where, for example, the counterparty traded. It was indicated where the counterparty traded in Italy and where it traded elsewhere – say, France, Germany or Eastern Europe.

Mr O’Reilly’s reply at 20.24 was as follows

“That’s a great list to start with thank you. No we won’t make contact with anyone at all it was more curiosity from my side on who we are missing. Once you join it shouldn’t take to (sic) long to onboard these guys anyway.

Chat later in the week.”

As Mr Oudkerk submits correctly, all of the information on the list supplied was derived from D1’s work with C and the combination of counterparty and trader names and notes as to the nature and type of business is plainly confidential within the definition of “confidential” in Clause 4.1 of the contract: paragraph 12 above. It requires no extended analysis, in my judgment, since Mr Elliott’s response to Mr Oudkerk in cross-examination demonstrates the validity of this proposition:

“I would like to say that if one of my staff sent a list of our customers to a competitor then I would not be happy about it …”

He did, however, go on at least partially to excuse it in this way:

“I think I would view it within the context, and there would be some extent of proportionality with regard to the action that we took, but I would say, as I say here in the witness statement, that the customer names are pretty well-known in that market, and I would be surprised if one of my staff had sent a list like that out to a competitor that it would cause us any significant damage.”

Mr O’Reilly, who was generally less concerned about the provision of this list (which is hardly surprising since he asked for it), accepted that he would have been concerned on behalf of D2 if one of its employees divulged to a competitor the identity of two potential new clients which is what the penultimate paragraph of the email referred to in paragraph 81 above.

“Q. … This is a reference to new TFS clients that TFS are trying to on board. That is right, is it not?

A. From reading the e-mail, yes, my Lord.

Q. You would not have that information from a publicly-available source, would you?

A. I would not, my Lord, no.

Q. You would not want a competitor to know that you have had a couple of hot leads that you were trying to on board, would you?

A: I would not, my Lord.

Q: You would regard that as a serious breach of the duty of fidelity of one of your employees if they sent that information to a competitor, would you not?

A: If they were new clients, yes, I would, my Lord.”

If only to emphasise that this kind of information must generally be considered to be confidential in the IDB community, the confidentiality terms in D2’s contracts of employment are instructive:

“10.1

In addition to and without prejudice to the Employee’s common law obligations to keep information secret, the Employee shall not … during their employment or after its termination directly or indirectly use, disclose or communicate Confidential Information and the Employee shall use their best endeavours to prevent the improper use, disclosure of communication of Confidential Information:

(a)

concerning the business of the Company or any Group Company and which comes to the Employee’s attention during the course of or in connection with their employment with the Company or any Group Company from any source within the Company or any Group Company; or

(b)

concerning the business of any person having dealings with the Company or any Group Company and which is obtained in circumstances in which the Company or any Group Company is subject to a duty of confidentiality in relation to that information.

10.2

For the purposes of this agreement, Confidential Information means:

(a)

any information of a confidential nature (whether trade secrets, other private or secret information including secrets and information relating to corporate strategy, business development plans, product designs, intellectual property, business contacts, terms of business with customers and potential customers and/or suppliers, annual budgets, management accounts and other financial information); and/or

(b)

any confidential report or research undertaken by or for the Company or any Group Company before or during the course of the Employee’s employment; and/or

(c)

lists or compilations of the names and contact details of the individuals or clients and counterparts with whom the Company or any Group Company transacts business; and/or

(d)

any financial results of any broking or trading desk and financial forecasts for any trading or broking desk of the Company or any Group Company; and/or

(e)

details of all financial instrument broking or trading systems, whether front or back office, and/or data processing or analysis software developed by the Company or any Group Company; and/or

(f)

details of the requirements, financial standing, terms of business and dealings with any Company or Group Company of any client of the Company or any Group Company; and/or

(g)

contact details of all employees and directors of the Company or any Group Company together with details of their remuneration and benefits; and/or

(h)

information so designated by the Company or any Group Company or which to the Employee’s knowledge has been supplied to the Company or any Group Company subject to any obligation of confidentiality.”

The giving of the information in the list supplied by D1 to Mr O’Reilly and the promised information about the two potential new clients would plainly come within Clause 10.2(a). Whatever the arguably more widespread availability of some of the information about the identity of clients, it cannot seriously be contended that C (or D2 if it was in the same position) was and is not entitled to regard this information as confidential. On the question of the alleged more widespread availability of the information, Mr O’Reilly accepted that the information was not publicly available and that it would have taken him some time to extract it from other sources. I am bound to say that if this kind of information is as widely available as Mr O’Reilly (supported by Mr Elliott) suggests, one wonders why D2 trouble to have the kind of clauses in the contract to which I have referred above. Nonetheless, Mr Cohen submitted that argument based on protecting confidential information arguments was a “red herring”. He suggested that even if some information is properly to be regarded as confidential, it comes nowhere close to justifying the PTRs with which this case is concerned.

Mr Cohen did accept that C has a legitimate commercial interest in protecting and preserving its customer connections, but submits that the level and significance of customer connection has been exaggerated by C and that 3 months is a more than sufficient period to build a relationship. I will deal with the argument concerning the length of the non-compete provision in due course (see paragraph 115 et seq), but notwithstanding the somewhat greater transparency in the market that Trayport provides (see paragraphs 25-31) compared with the pre-Trayport era, I do not think it can fairly be said that the concept of confidential information is a “red herring”. I am sure that if the boot was on the other foot, D2 would be arguing strongly to the contrary.

Whilst there is no evidence that D1 passed on any information about brokerage rates, it was, I think, accepted by Mr Elliott that he would not want brokerage rates passed to competitors. This was another item of confidential information.

Mr O’Reilly was at pains to say that he put the client list information supplied by D1 to no use, but I would be reluctant to accept that without the fullest possible investigation and disclosure which has not been possible in the time scale of this action. It is noteworthy that he forwarded the list to his work email account on the day after it was emailed to him. However, that is not the real issue for present purposes.

Giving information to D2 was one matter. The other issue to which C draws attention is the contact that D1 maintained with certain clients during the period of his employment and within the period of the covenants notwithstanding the relevant contractual provisions.

Extensive evidence has been advanced concerning contacts made by D1 with clients of C during the period from the beginning of July 2016 until he was obliged to stop working for D2 in early January 2017. Time constraints do not permit a full review of that evidence and I propose a very brief overview. However, it must be noted that a great deal of the disclosed material has been heavily redacted and that some material has been deleted. A fairly pragmatic approach to the redacted material had to be taken at the trial. Much of it was said to be irrelevant and much is said to be material of a personal nature. I have seen some un-redacted material which does certainly suggest that there were some pretty colourful passages of chat between the participants (most of whom, but not all, were male) which I can well imagine would be embarrassing if revealed publicly. I say nothing more about the content of these communications other than to observe that it suggests that the participants were prepared to exchange information of a personal nature which, of itself, suggests that they got on well. I am inclined to believe that the content of the communications represents the currency with which much of the dealing community, certainly within the younger elements, trades and, if that is right, it adds substance to the suggestion that, certainly by July 2016, D1 was on good terms with a good number of C’s clients.

There is further evidence of further contacts between D1 and clients of C during the period up until December 2016, but what is particularly relevant is that within the first day or so of beginning to work for D2 in January 2017 he was in contact with clients of C. I do not think that it matters for present purposes what their status was vis-á-vis D1 when he was with C.

Before the question of whether the non-compete clause is valid or invalid, the question of whether it is necessary at all arises. It is not entirely clear to me whether D is contending that clauses 14.1(b), (c) and (d) (see paragraph 13 above) are sufficient to protect C and that thereby there is no need for the non-compete clause. It is pleaded in the Defence, but on re-reading Mr Cohen’s written Closing Submissions, it did not seem to me that the argument was pursued. Mr O’Reilly sought to justify the proposition in his evidence, but the argument advanced by Mr Cohen is that the clauses identified above would prevent D1 “from soliciting or dealing with clients with whom he had historically immaterial dealings or where he had no dealings at all but had simply become aware of a client’s name in the course of his employment.” This, it is said, is wholly unnecessary for the protection of C’s legitimate commercial interests.

If the first argument is maintained then I agree with Mr Oudkerk that the necessity for non-compete provisions arises where non-solicitation and non-dealing covenants and confidential information restrictions are difficult to police or where there are material disputes as to what information is confidential: see, e.g., TFS v Morgan at [84], Tullett Prebon v BGC at [238] and Turner v Commonwealth and British Minerals at [18]. In this case both problems exist. I need not repeat some of the evidence summarised above. I should add that the parties cannot agree on which clients are embraced within the non-solicitation covenants. I have no doubt that a non-compete clause is, in principle, justified, as indeed is effectively recognised by D2 because its own contracts contain non-compete clauses.

The more substantive objection referred to above is, in my view, met by the considerations referred to in paragraphs 59 and 132 below.

The length of any non-solicitation clause seems to me to be governed by substantially the same considerations as affect the length of the non-compete clause and I see no need to deal with the issue separately. It is to be noted that Mr Cohen argues for the same length for each type of covenant (3 months) if each is held in principle to be justified.

I referred to the potential influence of an industry standard in terms of length of a PTR in paragraph 24 above. It does have to be borne in mind that when a court forms a view on an issue such as this it will have to do so based on evidence that will tend to be self-serving from whichever side it comes. A cautious approach needs to be adopted, but nonetheless if a pattern emerges it is a factor to be taken into account.

I will, for the moment, ignore any impact which garden leave might have on the potential length of the PTR.

In TFS Derivatives Ltd v Morgan (see paragraph 18 above) Cox J considered the position obtaining in the period 2003-2004 in relation to an equity derivatives broker and upheld a 6-month non-compete clause. She recorded (at [87]) that it was “common ground on the evidence in this case that the time needed to secure client relationships is between six to twelve months”, but it showed also “the impact on the team of brokers of one of their number departing and the destabilising effect that this can have on those who remain.”

In Tullett Prebon Plc v BGC Brokers LP & Ors (see paragraph 5 above), Jack J considered the evidence on this issue in relation to the practice prevailing in the period around 2008-2009. His conclusion was as follows:

“The number of successful experienced brokers of a product is limited. They cannot easily be replaced. There are only eight inter-dealer broker companies which are members of the Wholesale Market Brokers Association, including Tullett and BGC. The companies therefore seek to protect themselves from having their successful brokers recruited by a rival. They primarily seek to do so by means of contracts of employment lasting initially for two years or more, after which period the employee may give 6 or 12 months’ notice of termination, thus making a contract with a minimum term of, perhaps, three years, and that is followed by post termination restrictions or covenants which will prevent the employee working for a rival for a further period, typically 6 months. So, if an employee has just entered such a contract with a two year term, the contract may have the effect that he cannot work for a rival for 3 years and 6 months. The contract may also provide that he must inform his employer if he receives an approach from a rival or if he becomes aware that a fellow employee has done so. That gives the employer the opportunity of offering the employee a better deal and seeing off the rival. This may include a substantial sum by way of a ‘re-signing payment’. Contracts commonly contain a ‘garden leave’ provision, entitling the employer to require the employee to remain at home. This can be used to take an employee who has given notice out of the market with the advantages to his employer that his receipt of confidential information will cease, his connections cannot use him and so may be weakened, and that the employee will lose his feel for the market in the short term. All of that will make him less of a threat when he first joins his new employer. If a broker was not subjected to such restrictions, he could move from one employer to another with the strong likelihood of taking his connections with him.”

Mr Elliott said that he would expect “a middle ranking or senior broker to be on a six-month non-compete or post-term restrictions”. His contract and that of Mr O’Reilly had such restrictions as did the contract into which D1 entered. Those contracts contain an automatic set off for any period spent on garden leave although Mr O’Reilly’s contract was changed to this position during the currency of the litigation from a position for many years where no such set off was provided.

It has to be recalled that Mr Elliott is seeking to argue that D1 ought to have been on a non-compete PTR for 3 months only with C.

Mr Anderson’s second witness statement contained the following paragraphs on this issue:

“30.

Clearly I have not seen all our competitors’ contracts. But we pay careful attention to post termination restrictions in the contracts of people who want to join us. Moreover, I want to ensure our covenants are in line with market norms. If the covenants are too harsh they might be unenforceable but also may deter people joining us, if they think we are ‘that sort of employer’. If the covenants are too soft then our client base and employees are at risk. 6 months has, historically, been the “industry standard” for brokers at all levels. [D2’s] own PTRs are for 6 months (and are very similar to [C’s]) …. In fact, it takes considerably longer than 6 months to protect our client relationships when a broker leaves and to protect our confidential information …. We have chosen a 6-month period post-termination (together, where appropriate, with 3 months of garden leave during the broker’s notice period at [C]) to strike a balance between our own interests and those of our employees.

31.

I do not believe that there is any different market norm for a “junior” broker. PTRs are not based on the label “junior” or “senior”, but on what brokers do in practice.

32.

Increasingly, moreover, the major IDBs have been moving to much longer restrictions. I am aware that some of our competitors have contracts of employment for brokers with very long notice periods before 6 month covenants.”

He enlarged on that final paragraph with some anecdotal evidence about the current position. Mr Cohen put to him that, leaving to one side his personal views about whether certain covenants are adequate or not, the industry picture in 2005 was not different materially to the contemporary position. His response was as follows:

“I absolutely disagree with that …. Two points, if I may? Firstly, it is hard to separate my personal view from my business view. I think it is one and the same in this context. I have a big role in this business. But to specifically answer [the] question, since 2005 … there has been very well-publicised consolidation in our business, huge takeovers, mergers, the end result being that there are now two major broking groups: Tullett ICAP, TP ICAP, on the one hand, and the BGC Group, who are much bigger than anyone else. Tradition is now the third biggest broker in the world. In 2005, the broking groups owned by those companies, that was seven or eight brokers at the time, it has consolidated; and, what we have seen with that consolidation, of course, is more aggressive targeting of key staff, good brokers, and we have seen a very, very noticeable trend to PTRs at our competitors lengthening – and this is a very important context – and of the nearly 20 or so brokers that we are trying to hire at the moment from those big companies, some of whom I am directly involved in, some are staff of mine. The shortest PTR is six months, and several aim to keep the people out for 18 months. So, it is not right to say that nothing has changed since 2005. … I cannot comment on what you are saying about what you see from [D2], but in the big IDB world it has changed massively, a massive change ….”

He was, as it seemed to me, drawing a distinction between IDBs in the league of which C was a member and an IDB such as D2: cf. paragraph 36 above. However, he did say that it was D2’s contract that he noted “especially because it was so out of the ordinary.”

Mr Cohen submitted that Mr Anderson was prone to exaggeration and that this particular feature of his evidence should be treated with caution. I did not gain the impression that Mr Anderson exaggerated any aspect of his evidence. He was a careful witness who undoubtedly approached any answer with a cautious approach before making any concession that Mr Cohen was seeking from him. However, I thought his evidence was honest and balanced and this particular aspect had a ring of reliability about it coming, as it did, from someone actively involved in recruitment at the present.

The short point, for present purposes, is that I do not consider that a non-compete clause that keeps a broker of whatever experience or seniority out of the market for between 6-12 months is excessive by the current standards of the industry. That is not the whole answer to the issue in this case (see paragraph 24 above), but it is a factor to be taken into account.

As a matter of principle, this issue first arose in the case of Credit Suisse Asset Management Ltd v Armstrong [1996] ICR 882. It was a case where the defendants worked for the claimant as providers of investment services to private clients. There was a 6-month non-compete clause following the termination of the defendants’ contracts. Neill LJ summarised the defendants’ argument on the garden leave issue as follows:

“The argument on behalf of the defendants can be stated quite shortly. It was apparent from the terms of the restrictive covenants that the plaintiff had selected six months as the period for which it required protection. In the present case because of the garden leave the protection for which the restrictive covenants were designed would in effect extend for a period of 12 months from the date when the defendants ceased working at the plaintiff's premises. The protection given during the period of garden leave was greater but clearly comprehended all the activities set out in paragraph 6(a), (b) and (c). The law relating to restraint of trade raised questions of public policy. Thus, it was said, an employer should not be given any protection beyond that which was necessary in the circumstances. It was by that criterion that the validity of restrictive covenants was determined. The nature of the protection which the plaintiff needed had been stated in the restrictive covenants. The defendants did not, certainly at this stage, seek to challenge the reasonableness of the six months. But, in considering whether the restrictive covenants should be enforced, regard had to be given to the period of even wider protection which the plaintiff had achieved during the garden leave. Counsel suggested various ways in which credit could be given for the garden leave which … had extended for six months.”

The conclusion of the court (Neill, Morritt and Hutchison LJJ) expressed by Neill LJ was as follows:

“I am satisfied that … the court can exercise its discretion in deciding the permissible length of garden leave but, if the restrictive covenant is valid, the employer is entitled to have it enforced, subject to all the usual grounds on which an injunction may be withheld, such as delay and a finding that damages would be an adequate remedy in the circumstances. Moreover, it is to be remembered that the existence of a garden leave clause may be a factor to be taken into account in determining the validity of a restrictive covenant as at the date of the contract.

I would, however, add a caveat. Terms which operate in restraint of trade raise questions of public policy. The opportunity for an individual to maintain and exercise his skills is a matter of general concern. I would therefore leave open the possibility that in an exceptional case where a long period of garden leave had already elapsed, perhaps substantially in excess of a year, without any curtailment by the court, the court would decline to grant any further protection based on a restrictive covenant. But that is not this case.”

On the basis of the decision in the Credit Suisse Asset Management case, it is established as a matter of principle that the existence of a garden leave clause can go to the validity of a PTR or to the issue of discretion. The possibility of bringing garden leave into account in the validity argument was recognised in DP World Sydney Ltd v Guy [2016] NSWSC 1072, by White J sitting in the Supreme Court of New South Wales. However, according to the most recent edition of Goulding on Employee Competition (OUP, 3rd edition, 2016) at paragraph 6.309, “there is not yet a reported decision in which a restrictive covenant has been held to be unenforceable because of the length of the period of garden leave which might be imposed on the employee (enforceability being a matter to be determined as at the date of the contract).” As I understood him, Mr Cohen submits that this should be such a case. If this argument does not succeed, he submits that the analogous issue (namely, of D1 having been placed on non-client-facing duties during his notice period) should be taken into account in the ultimate discretionary exercise, the approach said to be appropriate by Jack J in the Tullett Prebon case at [221]-[224].

Mr Oudkerk submits that a combined period of potential garden leave and PTRs of 9 months is well within the bounds that the court would enforce in the IDB context, even had D1 been put on garden leave (which he had not). Looking at other areas, he cited Brake Bros v Ungless [2004] EWHC 2799 (QB) and Extec Screens & Crushers Ltd v Rice [2007] EWHC 1043 (QB) as examples of cases where garden leave, actual or potential, was not held to have extended the overall period of restraint unreasonably. He also refers to Mr O’Reilly’s contract with D2 which until very recently contained a garden leave provision and a notice provision (with no automatic set off for time spent on garden leave).

I will return to these issues when I come to expressing my conclusions on the validity/enforceability of the PTRs.

I will deal first with the length of the PTRs and, in particular, the length of the non-compete covenant. I have already concluded that such a covenant is necessary because policing a non-solicitation and confidentiality clause is almost impossible: see paragraph 96 above. I will deal with the issue concerning the breadth of the non-compete covenant later (see paragraphs 122-137).

Although extensive material has been put forward and extensive submissions made, I can express my conclusions about the length of the non-compete clause, whether with or without taking the garden leave provision into account, relatively briefly. The essential issue, of course, is whether the clause was reasonable in the interests of C and D1 at the time it was agreed. In my view, it was, whether the exercise in considering it should be seen to be taking into account the potential of an effective 3 months’ garden leave or not.

Viewing the contract at its beginning and looking forward to an initial term of two years (and possible renewed one-year periods thereafter), both parties must be taken to have contemplated that if 3-4 months’ notice was given by either party during the contractual period, and if C was to put D1 on garden leave and insist on the full 6 months non-compete period, he would be out of the broking market for 9 months during which period C would be looking to protect its client base and to find a suitable replacement for him.

In my judgment, the parties would reasonably have been expecting D1 to have established a strong client base with strong personal bonds with those clients during his Initial Term since it is common ground that personal relationships in this area are very important for a successful brokering exercise. In this highly competitive (but potentially very highly paid) market that would, in my view, be the obvious common expectation and, in D1’s case, his potential was plainly recognised by C and he himself will have had confidence in his own abilities. I would also conclude that the parties would at the outset of the “junior broker” contract reasonably have been expecting D1 to be engaged in a longer contractual relationship than merely the Initial Term. Nonetheless, whether simply viewed over the Initial Term or over a succession of Subsequent Terms, it was not unreasonable to contemplate at the outset of the contractual relationship that by the time that relationship came to an end, whenever it did and for whatever reason, C would need a reasonable period in which to shore up its client contacts and to find a replacement to take over from D1 in order to protect its legitimate interests. Whilst the non-compete provision would be a disadvantage to D1 at that time because he would not be able to start new employment in the same field for a period after the end of his contract with C, the reality is that D1 had been able to secure a very good and promising position with the third largest IDB in the world at a relatively early stage in his career by signing up to such a provision at the outset. If he had, for example, started his working life with D2, he might have faced only a 3-months’ non-compete period (with an automatic set off for any time spent on garden leave), but he would have been working for an IDB lower down the rankings in terms of size and market share in the area in which he was to work. In those circumstances, I am unable to see why a total of 9 months, if it should so turn out, should be held to have been an unreasonable period in those circumstances from the point of view of either party to the contract. The evidence suggests that it is within the bracket for brokers in this field, albeit some, more experienced brokers may face longer total periods out of work and some very junior employees with smaller IDBs may face slightly lesser periods. But the period itself reflects a reasonable pre-estimate of how long it may take for C to replace D1 at the same time as preserving the client base that he leaves behind.

Putting that analysis on a basis wider than simply by reference to the position of D1, it means that where the possibility of the employee being exposed to garden leave plus the non-complete clause has been taken into account it has not rendered the clause invalid. That said, it does not necessarily mean that a court would grant an injunction to support the whole period if not justified in the particular circumstances.

If, of course, it is not appropriate to take account of the garden leave provision at this stage of determining the essential validity of the non-compete clause, the foregoing conclusion is one that is reached a fortiori.

In fact, of course, D1 was not put on garden leave; he was expected to work, albeit on non-client-facing duties. That was the other option available to C under the contract. The reasons for taking this course, which was doubtless unwelcome to both sides, were understandable in the circumstances. But, as observed elsewhere (see, e.g., paragraph 132), it did mean that D1 remained in close proximity to all C’s operations on the Italian desk. He would have been privy to everything, or virtually everything, that was going on. It was not unreasonable in those circumstances to expect a full 6-month non-compete period once he left.

Two points are raised in this context, the first relating to the suggested prohibition of shareholdings in competing business activities and the second relating to the roles that D1 was precluded from taking by virtue of the non-compete clause.

Mr Cohen takes a point that does not seem to have troubled D1 or anyone within D2 when considering D1’s position during the summer and autumn of 2016. That does not, of course, make the point a bad one, but it highlights the need for close scrutiny of the argument.

In short, he contends that the non-compete provision plainly includes an interest by way of shareholding in a competitive business and that this is wider than reasonably necessary in C’s interests. The prohibition, he contends, is to be derived from the correct interpretation of clause 14.1(a) because the status of “interested” is specifically identified within that clause. For convenience I set out the relevant part of the clause with the relevant words emphasised:

“You agree … you will not … directly or indirectly do or attempt to do any of the following:

(a)

… undertake, carry on or be employed, engaged or interested in any capacity in either any business activity which is competitive with Relevant Business … or any business activity an objective or anticipated result of which is to compete with Relevant Business …”

He asks rhetorically “What else could ‘interested’ mean if not an interest in a competitive business?”

In response Mr Oudkerk draws attention to clause 3.2 of the contract which reads as follows:

“Unless you have obtained the prior written consent of [TFS], you may not during your employment be directly or indirectly engaged or concerned in the conduct of any other business, nor may you be directly or indirectly financially interested in any such business save through your holding or being interested in listed or unlisted investments representing not more than five per cent of any class of securities in any one company. You may also not undertake any paid work in your spare time without obtaining the prior approval of a Director of the Company, as he will need to be satisfied that this work will not affect the performance of your duties.”

His argument is that the contract must be read as a whole, that there is express provision (Clause 3.2) relating to shareholdings during the currency of the contract (which permits a limited quantum of shareholding in another company) and that it cannot sensibly have been intended that D1 should be subject to a more onerous restriction as to shareholdings after his employment had terminated than whilst still an employee, particularly if it is suggested that the more onerous obligation is created by a clause that makes no express reference to shareholdings at all. In other words, whatever “interested in any capacity … in any business activity” means, it cannot be a reference to a shareholding. By way of emphasis he submits that Mr Cohen’s interpretation would mean that D1 could have had a 1% shareholding whilst he was employed (because the ceiling was 5%) but as soon as he was no longer employed he would have to sell his 1% shareholding.

He also suggests that passive investment by way of a minority shareholding is not a “business activity” since the only kind of business activity to which the clause could relate was the activity of the relevant desks. If that argument was the only argument on this issue, I would be less convinced by it. “Business activity” is a wide and somewhat amorphous expression and might, when combined with the concept of an “indirect interest” in such an activity, embrace involvement in a company that carried out IDB work simply through owning a shareholding in that company. However, I consider that reaching such a conclusion would require some other indicia in the contract and I do not see the presence of such indicia: indeed Mr Oudkerk’s primary argument set out in paragraph 127 above seems to me to negate it. If I was wrong about that, I would certainly conclude that the expression relied upon by Mr Cohen was ambiguous and, by applying the principle set out in paragraph 20 above, it should be construed as rendering the provision valid rather than invalid.

I see this as a straightforward issue of simply seeking to give effect to the proper meaning of this contract. I have not, of course, overlooked the authorities to which Mr Cohen referred, including Scully (UK) Ltd v Lee [1998] IRLR 259, but they do not, in my judgment, take the issue any further. Each involved the construction of the particular contract in question and, as Mr Oudkerk observes, in Scully the non-compete clause made express reference to “shareholdings” whereas that is not the case here.

In those circumstances, I do not consider that the issue of whether the need to employ any “blue pencil” arises in this context.

Another point that does not appear to have exercised D1 or D2 at the time they were considering D1’s position vis-á-vis C, is whether the non-compete clause goes further than necessary in precluding D1 from taking on roles other than broking. Mr Cohen contends that since the clause seeks to prevent competition with “the areas of business … with which … pursuant to your duties you were materially involved” (see Clause 14.2(d) set out in paragraph 13 above), it has “no limitation in ambit to any particular type of job.” On this analysis, he submits that D1 “would be prevented, for example, from taking a back-office job in respect of Italian Power with a competitor, which job would involve no broking at all.”

I regret to say that I do not fully follow this argument. It is a little odd, as it seems to me, to be contending that D1 should be permitted to carry out back office work for a competitor during a non-compete period when his case is that when employed by C as a junior broker he spent 4 hours each day on back office work (and was thus “materially involved” with such work). But be that as it may, the issue is the construction of the relevant contractual provisions. If they do prevent taking on such work, I am wholly unable to see why the prohibition is too wide: it is needed to protect C’s confidential information, particularly information concerning its client base, whilst the employee with knowledge of that information is removed from the picture. The knowledge gained of such confidential information is achieved no less by working in the back office than by working on the desk, certainly for someone of the equivalent status within C as D1. It appears that C imposes non-compete restrictions on its own back office staff (or at least some of them) and that, in the circumstances of this trade, is understandable. I do not accept, as Mr Cohen suggests, that this a “quite remarkable” conclusion. Equally, I do not find anything in Ashcourt Rowan Financial Planning Ltd v Hall [2013] IRLR 637, which again required the construction of the relevant clause in the appropriate context, that compels a different conclusion.

I do not consider that the issue thus raised affects the validity of the non-compete clause.

Another argument in this context, which was not developed orally by Mr Cohen, but seems to remain in the written submissions, is that the clause would extend to prevent dealing with “secondary clients” of C and that this was wider than necessary to protect C’s interests.

It is common ground that a broker will ordinarily have a stronger and closer relationship with his “primary” clients than with his “secondary” clients. However, C’s client connections with the “secondary” clients, even if, as a matter of fact, generally preserved by the broker who usually deals with them, are important to C and represent a legitimate interest that it is entitled to protect from the influence of a departing broker.

I draw some support for that latter conclusion in the judgment of Jack J in Tullett Prebon (when he heard a good deal of evidence concerning the work of IDBs) at [240]:

“Tullett also relies on clause 12(1)(b) and (c). Objection is taken here to the definition of ‘Client’. It is said that it should be limited to clients for whom the broker was first cover, and that clients for whom the broker was second cover should be excluded. A broker who is second cover should establish a good relationship with the client. It is unlikely to be as strong that of the first cover, but Tullett is reasonably entitled to protect it ….”

Whilst it is not directly relevant to the issue, it is not without interest to note that in the few days that D1 worked for D2 in January 2017, he was in touch with a number of his former “secondary” clients from C. Mr Oudkerk makes the point that the common expectation of the parties at the outset of this contractual relationship was that D1 “would develop valuable relationships with ‘secondary’ clients of the Italian desk” as well as those (albeit closer) with his primary clients. That, in my view, is correct.

For the reasons I have given, I consider that all the PTRs, properly construed, are valid and enforceable.

I have borne in mind the proposition advanced by Mr Cohen that D1 was “vulnerable” at the time he signed up to them (see paragraph 47 above). I accept, of course, that he was effectively embarking on his career, a career which, incidentally, he will be able to take up again within a matter of weeks of this judgment with an IDB that justifiably shares his own strong belief in his abilities. However, at the time he agreed to the provisions in the contract, a number of factors are relevant: (a) he was a very well-qualified young man with a number of degrees behind him (see paragraph 38); (b) he spoke three languages, including English (albeit perhaps not as fluently as his native language and, perhaps, Spanish); (c) he took the decision to come to London where, as he perceived it, the prospects were better than in Italy; (d) he had worked for C for a year prior to signing up to the terms having signed up to similar terms a year previously; (e) he was aware of the terms; and (f) his essential character was plainly that of someone who was setting out to succeed in what he undertook (which is evidenced and confirmed by the steps he took to develop his skills during the 18 months before he was “head-hunted” by D2). This is not the picture of a vulnerable young man. Neither is it the picture painted by Mr Cohen’s graphic imagery of a “minnow, swimming with sharks” nor of someone who “enjoyed no negotiation power and was extraordinarily vulnerable to abusive contractual terms.” If the terms were plainly “abusive” by the standards of this particularly competitive (but, I emphasise, highly paid) industry, then, of course, there would be grounds for intervention, but that has not been demonstrated. He wanted to be part of C, with all the benefits that that would bring, and he was prepared, at that stage, to sign up to its terms with full knowledge of the implications even if he simply regarded the terms as “standard”. Even if he did not take formal legal advice, it would have been open to him to chat quietly with some of the contacts he had made to see what they thought of the relevant terms.

I do not see D1 as in the category of “traveller” within the well-known dictum of Denning LJ, as he then was, in M and S Drapers (a firm) v Reynolds [1957] 1 WLR 9:

“A managing director can look after himself. A traveller is not so well-placed to do so. The law must protect him.”

He was not a “managing director” either, but he had the ability to make up his own mind about the basis upon which he was to be engaged for at least the first two years of the career he had chosen.

Notwithstanding the validity and enforceability of the PTRs in this case, should the court’s discretion be exercised to permit D1 to re-commence working for D2 before 1 May 2017?

At the time I am making this decision, there are, in the events which have happened, less than 4 weeks to elapse until D1 is free to work for D2. It may be thought that the decision is academic. Frankly, it is, but nonetheless it is an important part of the court’s task and I do not think I should ignore it simply because it seems academic. It does have to be said that had D1 been advised to give notice to C soon after his contract ended in October 2016 that he was intending to start with D2 in January 2017 and had been advised not to delete any exchanges he had with those for whom he acted when with C, the issue could have been ventilated in court long before it was with potentially all relevant information available. However, the timetable for proceedings began in early January and has now, after an extensive review of the documentary material and the lengthy submissions, run its course 3 months later.

Whilst the court must approach the issue of discretion with an open mind notwithstanding the decision that the PTRs are valid and enforceable, good grounds must be shown for permitting such contractual obligations to be set to one side: see, e.g., Araci v Fallon [2011] EWCA Civ 668 at [70] and D v P [2016] ICR 688 at [20]-[21].

Mr Cohen argues that C needs no more protection for its client base now and that “it needed no more protection when the matter came before the court for interim hearing”, echoing his bold contention that “interim relief should never have been granted”.

I do not accept this. The reality, as I have indicated, is that D1 was privy to what was going on on the Italian desk at C until 19 October 2016, albeit not directly as the result of active broking. He was not on garden leave such that he had no such access. For the reasons I have given, I am quite satisfied that C was entitled to a 6-month period when D1 was subject to a non-compete clause in order to shore up its client base. Merely because C had managed to recruit a (much less experienced) substitute for D1 makes no difference to that position. Because of the deletion in December 2016 (according to D1) of at least two sequences of messaging between D1 and clients of C with whom he had dealt, it is not possible to draw clear conclusions about the extent to which C had managed to shore up that client base and protect its legitimate interests.

D1 was paid his basic salary with C until 31 October 2016 and has been paid a “sign on” fee of £40,000 by D2. Whilst I understand that this might well constitute “small pickings” in the context of the kind of earnings that he might have made had he been able to start with D2 in January and to continue, but it is a result of moving on in the way he (with advice) chose to move on.

I do not consider there are grounds for exercising the residual discretion that the court possesses in this context now and neither, on the material presently available, do I consider that there would have been any grounds for doing so at an earlier stage in the 6 months since 31 October 2016.

In the light of my overall conclusion on the PTRs the issue of “springboard relief” does not arise and I propose to express no view about it.

I hold that the PTRs were and are valid and enforceable and that there is no basis for exercising any discretion to modify their impact.

I am grateful to all Counsel and the rest of the legal teams for their considerable assistance.

The draft of the substantive judgment in this matter was supplied to the parties at about 11.00 on Thursday 6 April. Arrangements were made for any suggested corrections to be submitted to me via my Clerk by 09.30 on Friday, 7 April, with a view to my handing down the final version at 14.00 that day. The reason for the somewhat foreshortened process was the need to provide the final judgment at the earliest possible opportunity given that the hearing of the case represented an expedited hearing and the question arose of whether D1 could start work with D2 before 1 May.

Both parties supplied lists of suggested typographical corrections, all or substantially all of which have been incorporated in the substantive judgment.

With the list of suggested corrections on behalf of D, I received a letter from Mr Cohen raising concerns that I had not addressed certain matters in the judgment and that I had misunderstood his submissions on certain issues. The letter was addressed courteously and I have no complaints about it other than to observe that, so far as I can recall from my personal experience, it is a rare occurrence. Since he drew attention to the foreshortened process, I thought on reflection it was better that I should give him the opportunity to amplify his concerns and allow Mr Oudkerk then the opportunity to respond to them and I would then review the position in the light of those representations. Mr Cohen supplied a more detailed Note over the weekend and Mr Oudkerk replied on Monday, 10 April, at about 15.40.

The same urgency applies to dealing with these matters as it did when the substantive judgment was made available to the parties and, accordingly, I have produced this Supplemental Judgment overnight. The parties have seen it to give an opportunity for any typographical corrections and it has been handed down on Wednesday 12 April, the last day of the current legal term.

Mr Cohen’s Note contains a section entitled “Permissible and Impermissible Amendments to a Draft” and he helpfully drew my attention to what has been said in various authorities about it. Again, the matter has been put forward perfectly courteously. I have not had the time to consider these authorities in detail (although I have been supplied with them) and I do not think it would, in any event, be a very profitable exercise. I am, of course, broadly aware of what would or would not be acceptable in this context and I am aware of what is said about it in the White Book. However, in order that no-one should think that I have amended the draft substantive judgment in any meaningful way, I have decided to leave it wholly unamended (save for the typographical amendments to which I have already referred) and to produce this Supplemental Judgment to the extent that I feel it is necessary to enlarge upon what is in the substantive judgment. If the substantive judgment and this Supplemental Judgment fall to be considered elsewhere, then appropriate conclusions can be drawn by those reviewing them.

Before turning to the specific matters raised by Mr Cohen, I do think that the context needs to be understood. What follows is not intended to be some kind of mea culpa, but merely an amplified restatement of what appears in parts of the substantive judgment:

In the normal course of events, in a case lasting five days with a significant quantity of evidence, with very substantial legal submissions and citation of authority, I would ordinarily not expect to be able to give a fully considered, reserved judgment for about 4 – 5 weeks. As everyone must know, while some dedicated judgment-writing time is written into a judge’s schedule, it is often difficult to complete a judgment in such a case within the period allotted and completion of the judgment must take place during other periods that can be found in the midst of other judicial duties. A period of 4 – 5 weeks in a case of this nature will usually give sufficient time for checking to see that all material matters have been dealt with fully. As it is, the draft judgment in this case was produced in about half of that time (during which period I had other sitting commitments) for the reasons I have given.

I make no complaint that Ds should wish to draw attention to what are suggested to be omissions and errors, but it must be understood that it was Ds’ decision not to alert C to what it was proposing with the result that the issues in this case could not be litigated until they were. Had C been alerted to what was proposed just after the end of D1’s contractual term came to an end, the issues could have been litigated at an earlier stage and not at a time when the PTRs had almost run their course.

My final prefatory remark is to remind D that I drew attention in the substantive judgment to the time constraints within which I was preparing the judgment and the need to be selective on the issues to be addressed: see paragraphs 32 and 92, in particular. I also expressed some reservations about how relevant some of the evidence was to the issue of the validity of the covenants and that I would restrict my findings to those issues that seemed to me to be of relevance: see paragraphs 48 and 49.

I will turn now to the issues raised. I should emphasise (because Mr Cohen’s Note does mention matters that he considers are matters for appeal rather than for review of the draft judgment, and that others might not be the subject of an appeal if dealt with now) that I am merely going to deal with the issues as I think fit. I am wholly uninfluenced by whether he and his team perceive that there are or may be grounds for appeal. It must be a matter for him and his clients as to how these matters are developed further if that is what they wish to do. All I will say is that if it is correct that there are omissions or misunderstandings, (i) it is always open to the respondent to an appeal to seek to sustain the judgment by reference to other material not referred to in the judgment and (ii) that, if I am to do my duty to reach what I consider to be the right conclusion, I cannot avoid expressing myself entirely openly, unconstrained by threats of what the appellate consequences might be.

Mr Cohen’s first complaint relates to my conclusion on the duration of the PTRs. He says that I have not made findings based upon “evidence on a number of key issues going to duration” and that I reached “an unreasoned determination” on the length of the PTRs. He refers, in particular, to what he says was the “unchallenged evidence on the question of how long was required for identified brokers of [D1’s] seniority, in this area of business, to develop relationships with clients from a standing start” and also evidence concerning “the value and durability of the supposedly confidential information relied upon by [C] in justification of the PTRs”. He says that this evidence “was the platform on which the Court’s decision as to enforceability should have been made.” He also says that this omission is irremediable and it undermines my whole conclusion which can only be remedied by an appeal.

I do not, with respect, agree with any aspect of this save that I agree that I did not make express findings of fact on certain matters that he asserts are “key”. His submission begs the question of whether those matters are truly “key” to the issue under consideration. I have re-read the paragraphs in his written Closing Submissions that he says contain all the appropriate submissions. My view now, as it was when I composed the substantive judgment, is that they do not advance his case materially. That is why they do not find the kind of expression in that judgment that he submits they should. Paragraph 116 of the substantive judgment demonstrates that I had, as was the case, considered the “extensive material” and “extensive submissions”, but felt that the conclusion could be stated quite shortly. I should observe that I dealt with the issue of a possible “industry standard” fully in paragraphs 99-109 which was largely the foundation for the conclusion as to the “bracket” in paragraph 118 in which paragraph I also refer to the reasonable period necessary for C “to shore up its client contacts and to find a replacement to take over from D1 in order to protect its legitimate interests”.

The “platform” for the decision as to the length of the PTRs is, as I have indicated, constituted by a combination of the “industry standard” (built in to which must be an industry recognition of what period is required for an IDB to shore up its client base and secure a suitable replacement for a departing employee) and the particular circumstances of the particular IDB and employee. There was ample evidence about both matters (and, of course, other cases where the “industry standard” was considered in detail) and it justified the observation that the period in this case represented “a reasonable pre-estimate of how long it may take for C to replace D1 at the same time as preserving the client base that he leaves behind.”

I decline to enlarge on this further because I consider the issue is as fully and properly ventilated in the substantive judgment as, in the circumstances, is required.

The next complaint is that I did not deal with his submission that the non-compete clause prevented any involvement in business outside the Italian Power area “without justification”. His Note says this:

“Since this argument is not addressed at all, the Defendants invite the Court to do so in a revised draft. The failure to consider this point is a clear omission and if the Court now does so an appeal on it may be avoided.”

Mr Cohen is quite correct: the draft judgment does not deal expressly with this point (which remained a “live” point) and if my obligation was to cover every point taken, it should have done. I remain firmly of the view that, in the circumstances, it was appropriate to be selective, but for completeness I will deal with it in this Supplemental Judgment, albeit, I emphasise, not in order to obviate an appeal.

I can do so shortly. Mr Oudkerk’s written Closing Submissions had put forward a number of persuasive points on this issue in paragraphs 49-55. However, there were three particular matters that made an impact on me in this context: first, that the client list that D1 supplied to Mr O’Reilly (see paragraphs 81-88) referred to a number of clients from countries other than Italy, including “France, Germany or Eastern Europe” (see paragraph 82); second, that when Mr O’Reilly (perhaps somewhat triumphantly) sent an email to his colleagues at D2 on 11 July 2016 (announcing D1’s forthcoming move to D2), he said “[D1] has experience in Italian, French, German and Spanish power”. The suggestion he made during his cross-examination that this latter comment was a deliberate lie to his staff was a surprising explanation since, if what he said to them was untrue, sooner or later the truth would have been revealed, thus undermining the trust and confidence that his team would have in him. It is more likely to have reflected what D1 had said to him. It is possible, of course, that it was itself an exaggeration by D1, but it is at least partially supported by the list to which I have referred and the third consideration to which I will now refer. Third, in the few days that he did work for D2 in early January, according to the disclosed records, D1 did deal with French and German clients. This lends credence to the proposition that, by whatever means (whether through client-facing activities or knowledge obtained simply working near the other desks or in a back office capacity), D1 did have contacts (or confidential information about contacts) outside the Italian market which he secured (or obtained) during his time with C.

This evidence, albeit ex post facto in relation to the position at the time the PTR was entered into, in my judgment, is the clearest possible “justification” for the covenant. I see no need to go further than that on this issue.

I dealt with what I perceived to be Mr Cohen’s argument at paragraphs 131-133 of the substantive judgment.

Mr Cohen says that I should not have had difficulty understanding the argument because it was articulated clearly, particularly in the following words of his written Closing Submissions:

“The PTRs here are designed to prevent [D1] from exploiting his client relationships, yet they would prevent him from taking a non-client facing role which was concerned with Italian Power (or even, on Tradition’s case, many other geographies of Power).”

I do not think that I misunderstood this argument at all. What I could not really understand was the articulation of the argument as set out in paragraph 131 for the reason I gave in the second sentence of paragraph 132. That was merely an observation. But the substantive reasoning of the judgment thereafter is surely clear when the paragraph is read as a whole. It might have been slightly clearer if I had said –

“the first issue is the construction of the relevant contractual provisions. If they do prevent taking on such work, the second issue is whether the prohibition is too wide …”,

- and had then gone on to answer each issue separately. However, the answers to each issue are absolutely clear from what follows and, in my view, the rest of the paragraph makes perfect sense. I really do not think that it requires further elaboration and what would be said would simply be repetition of everything that appears from the words “I am wholly unable” to the words “is understandable”. My reference to Ashcourt Rowan was simply to suggest that it was a case that was determined on the basis of the interpretation of the relevant clause in that case and the circumstances of the particular employee. I did not see it as affecting the outcome in the present case and it required no more detailed analysis.

The final point relates to paragraph 134 of the substantive judgment. Mr Cohen’s Note contains this concluding assertion:

“Since the Court has addressed an argument that the Defendants did not make and has not addressed the argument that they did make, the Defendants invite a revised draft to address the point. The Draft shows a plain error and an appeal on this point may be avoided if the Defendants’ argument is now dealt with.”

I repeat that any additional material put forward in this Supplemental Judgment is not put forward because of an assertion of that nature, particularly the second sentence.

Mr Cohen says I have missed the point. It is not, he says, that C had no legitimate interest to protect in respect of secondary clients, but “the rather more sophisticated point was that the ‘dealings’ threshold omitted a requirement of ‘materiality’ or “regularity” (as is generally found in covenants of this kind) and the ‘confidential information’ threshold was too widely drafted)”.

If I did miss the point, I would observe that C’s team may have missed it too: in paragraph 61 of Mr Oudkerk’s written Closing Submissions he said this in relation to Mr Cohen’s arguments about the client covenants:

“… it is said that the definition of “Client” is too broad, in that it extends to clients who were “secondary”, rather than “primary” clients of D1.”

He then goes on to address that issue at some length and, I believe, dealt with it in his oral submissions.

Mr Cohen exercised a brief right of reply after Mr Oudkerk’s oral closing submissions and having reviewed the final passages of the transcript, I have noted Mr Cohen as saying this:

“I come next to the issue of client covenants. Mr. Oudkerk says the case run against him is that we are seeking to carve-out clients where [D1] is second cover broker. That is not the case. We accept that a broker might have a good relationship with a second cover client. That is not what we are seeking to criticise. The point is, the absence of any sort of material or regular dealings threshold in the client covenants, because absent that, what it does is to pick up those clients with whom [D1] may, for example, have brokered a transaction once because he happened to be the person who picked up a phone when somebody else was away from the desk, that is the criticism that we make.”

It is not, I hasten to say (because Mr Cohen expresses anxieties about it in his Note), a question of overlooking what was said in the written submissions (which were indeed fairly extensive on this issue), but the need in cases such as this, with extensive written material to be considered in a foreshortened period, for the oral submissions to identify, if necessary in bullet point fashion, the points that are truly being deployed: see my observation on Day 4 when I said that “it is always useful to have the bullet points, the central parts of your submissions at the forefront of a few oral submissions.”

I fear that the subtlety of the point may have eluded me and C’s team notwithstanding this clarification.

At all events, I do not think the point is a good one. Mr Cohen places reliance on a passage in his cross-examination of Mr D’Aniello to suggest that C would not be worried if a second cover broker left C because the first cover broker was still in place to secure the continuity of the relationship with the client. The actual interchange was as follows:

“Q: What you talk about there is time and effort to rebuild a relationship. We heard some evidence already in this case about how long it might take to rebuild a relationship, but I just want to ask you a more specific point. If the broker who leaves is the second cover broker, but you keep the first cover broker, so, to take a situation where you are the first cover broker and [D1] is the second cover broker and he leaves, you would not be very worried about your client base being tapped up by him, would you?

A: Not extremely worried, no.”

Mr D’Aniello was, of course, expressing his own view of the position, but he did not say that he would not be worried, but simply that he would not be “extremely worried”. Mr Cohen did not refer to what Mr Anderson, the CEO, said on the topic during his cross-examination:

“Q. So, the person who is the primary relationship holder is still with you?

A.

Absolutely, and the PTRs allow us, for that broker, to carry on with that client as part of your franchise, unhindered by a potential threat, who obviously has some form of relationship, which is not immaterial, going to a competitor and pulling that client away from us. It is absolutely relevant.”

It follows that, in his view, the secondary broker contact with a client was “not immaterial” and was “absolutely relevant” to the PTRs.

On the facts of this case, there was plenty of evidence that D1 had sufficient association with his secondary clients at C for him to be in contact with them both before he left C and afterwards. Mr Oudkerk’s Closing Submissions identify the evidence at paragraph 65, in particular, and I do not need to set it out.

Mr Cohen makes the point that in D2’s client covenants the definition of “clients” utilises the concept of “material involvement” and that in relation to another IDB (namely, BGC) the client covenants bite where there are “material and/or regular dealings”.

That may be so, but does it mean that C’s covenants are invalid because such a phraseology is not used? I do not think so. There is evidence (in the form of Mr Anderson’s view) that C regards the involvement by a former employee who had “some form” of relationship with a secondary party with that secondary party when starting to work for a competitor is something that should be prevented for a period in order to protect C’s legitimate interests. That seems to me to be an entirely justified position to take as indeed the evidence in this case demonstrates.

I have now dealt with the points raised by Mr Cohen. Had I been persuaded that any of the points raised required me to change the conclusion to which I had come in the draft of the substantive judgment, I would have done so.

However, that has not been the case. Notwithstanding all the challenges directed at the PTRs, I do regard this is a clear case where they are valid and lawful.