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Restraint Clauses: Wrongful Competition and the Blue Pencil

22nd August 2019

There is an air of curiosity about Tillman v Egon Zehnder, the first employee competition case to reach the Supreme Court for 100 years. Ultimately, the employer (EZ) won its argument that two words could be “blue pencilled” from a non-competition clause, so that the unaffected content remained valid and enforceable. But there was a sting in the tail… The restraint in question involved the employee (T) agreeing that she would not “directly or indirectly engage or be concerned or interested in any business carried on in competition…” with EZ. In seeking to join a competitor, T argued that “or interested” made the entire clause too wide to be enforced, because it might have prevented her from owning even a single share in the competitor. It was not, however, her intention simply to own a single share or more than one. Her intention was to join the competitor, on 1 May 2017. The restraint, if unchallenged, would have expired on 30 July 2017. On 23 May 2017, EZ obtained an injunction to stop her joining the competitor. On 21 July 2017, the Court of Appeal overturned that decision and discharged the injunction. There were now 9 days left on the restraint. EZ chose to appeal to the Supreme Court, who heard the case 18 months later (!) on 21/22 January 2019 and delivered judgment on 3 July, formally restoring the injunction in relation to the long expired restraints. The basis of its decision was that the two offending words could…

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Small Claims Action Costs: our recent exception to the norm

21st February 2019

“I know my claim is for less than £10,000. The defence is nonsense and the defendant knows that. I’m told that I’m highly unlikely to recover any of my legal costs. But I can’t take the risk of losing because there are really important principles at stake…” Have you ever contemplated this dilemma when your small claims action is heading for trial? Do you wonder about the lesser evil, and end up contemplating settlement on terms that would stick in the craw and leave your opponent with an undeserved windfall gain? Or do you accept that a day in court with legal representation will come at a price? The court rules do indeed impose a “no costs” regime in small claims actions, to encourage an informal approach to their disposal. But there are exceptions. One of them is “costs as the court may assess by the summary procedure and order to be paid by a party who has behaved unreasonably”. What might count as unreasonable behaviour? We had a good example recently. It involved a defendant who claimed that he had never received goods worth just under £10,000. At the time, he showed none of the natural shock and outrage that might have been expected at their apparent non-arrival. He then declined to engage with a Royal Mail investigation, but waited a few weeks before clawing back his credit card payment, leaving our clients out of pocket. He also closed his mind to the fact that he had agreed terms…

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When workplace procedures are followed, and common sense is not

2nd July 2018

Imagine that you have had an argument with a work colleague that led to a “fact finding” interview with HR and a verbal reprimand then and there. It leads you to realise that you might have given offence, even if the colleague had been oversensitive in taking it. In turn, you decide to apologise to your colleague for having done so. Closure, surely. Would you then expect, two working days later, to receive an HR missive on company letterhead about this “incident”, summoning you to a disciplinary hearing on barely 24 hours’ notice and stating “the outcome of this meeting could potentially lead to your employment with the company being terminated”? Now imagine you are the employer. How would you feel about your HR manager escalating matters like that, and putting your company at risk of an unfair dismissal claim (actual or constructive) via an overreaction that might lose you a valuable employee? When we stepped in on an employee’s behalf in a situation like this not long ago, we ensured that the company stopped the disciplinary process in its tracks and withdrew the letter. But this was achieved only after the HR manager had sought to justify it with claims that the letter was “just a standard template”, and that the disciplinary meeting was needed to document the issues in case the oversensitive colleague ever made a complaint against the company at some point in future. Does this not seem to be taking “cover yourselves” to extremes, with little regard…

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Suspending Employees (2): No, It’s Not A Neutral Act

14th November 2017

Imagine you are an employee. You have been summoned to an unexpected meeting with HR and you have no idea why they want to see you. No sooner does the meeting start when you are told that you are going to be suspended pending a disciplinary investigation. You are handed a letter prepared in advance that describes the suspension as “precautionary” and “a neutral action”. Unless some long forgotten but undeniable misdemeanour has been found out at last, you are going to be hopping mad. Or deeply upset. Or both, especially if you are escorted from the premises with everyone looking on, or if the rumour mill kicks off as soon as your unexplained absence sinks in. Now imagine you are the employer. You have some instinctive feeling that suspension must be the right step. Or indeed a necessary step. You might hope that it would help kick the can down the road if the investigation was going to be tricky. Or you might not like the soon to be suspended employee very much, and you might believe that this was a good way to hold the exit door open, especially if the hinges were greased with a severance package (hint, hint). What does the law have to say about that? In the recent case of Agoreyo v London Borough of Lambeth [2017] EWHC 2019, the judge decided that suspension breached the implied term of mutual trust and confidence. If Ms Agoreyo, a teacher in charge of children aged between 5 and 6,…

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Suspending Employees: sensible step or overreaction?

28th July 2017

When might it be a bad idea to suspend an employee ahead of a disciplinary process or investigation? Or, from the other side of the divide, when might a suspended employee be entitled to conclude that the exit door is firmly open and the mind is firmly closed? Sometimes, suspension is a matter of plain common sense. If a fight has broken out in the workplace, or if there are clear signs of theft or sabotage, it is only right and proper to diffuse the heat or preserve the scene. As the ACAS Code confirms, suspension may be necessary in gross misconduct cases (subject, of course, to proof), or where there are risks to evidence or property, or responsibilities to others. Keep it short, paid and under review, and there should be no scope to allege that the process is tainted or that dismissal was a foregone conclusion all along. And yet we continue to hear of cases where an employee is suspended almost on a whim, as if it is a natural element of a disciplinary process or investigation, despite the absence of heat, exposure or vulnerability. Suspension, for instance, where a middle ranking or more senior manager has simply checked up on previous precedent when negotiating an exit package, or argued intemperately with a subordinate outside the workplace, or fallen out of favour with a controlling boss. “Oh, but we tell them that suspension is not considered a disciplinary action. Just as the ACAS Code recommends.” Hmm. How…

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Pre-Termination Negotiations: what happens if they break down?

14th July 2016

The opportunity for an employer to hold a pre-termination negotiation with an employee under s.111A Employment Rights Act 1996, to explore possible termination of employment on an off the record basis, is a very useful way to avoid prolonged workplace disputes. What happens, though, if the discussion breaks down, an unfair dismissal claim is made, and the claimant wants to tell the tribunal that there was such a discussion, without going into its contents (which the law plainly does not allow when an employer has behaved properly)? The Employment Appeal Tribunal’s recent decision in Faithorn Farrell Timms LLP v Bailey has resolved the point. The principle that allows genuine pre-termination negotiations to remain secret does not simply apply to the contents of the discussion. It extends to the mere fact that there has been such a negotiation. And it does not simply protect the direct discussions between employer and employee. It extends to internal discussions within the employer, for instance between a manager and an in house HR advisor. In this particular case, where it was alleged that the pre-termination negotiation had in itself involved sex discrimination, the employer chose initially to waive privilege for its own tactical reasons, and was not allowed to renege on this. But the principle of secrecy remains good. There will of course be practical problems. What if a tribunal notices an apparently inexplicable gap in the course of pre-claim correspondence, and seeks to hold that against one of the parties (for instance, in the…

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Religious Beliefs In The Workplace

14th April 2016

An employer decides that a devout Christian employee (VW) overstepped professional boundaries when she invited a Muslim junior to church events, prayed for her and laid hands on her during a 1:1 meeting, gave her a book promoting conversion to Christianity, and told her that she needed to let Jesus into her life. It issues VW with a written warning and recommends she underwent training. VW claims this was direct religious discrimination and harassment, especially given the oppressive nature of the sanction. The Employment Tribunal rejects VW’s claims. What did the Employment Appeal Tribunal decide when VW appealed? The appeal in Wasteney v East London NHS Foundation Trust was dismissed. One reason for the EAT’s decision to uphold the earlier ruling was that the employer’s decision was ultimately nothing to do with manifesting a belief (by reference to the language of Article 9* of the European Convention on Human Rights), and everything to do with improperly pressurising a colleague who did not consent to a campaign tantamount to grooming. This led in turn to a clear finding that “sharing her faith with a consenting colleague”, as VW put it, was a wholly inaccurate description of what actually took place. The colleague in question made serious complaints against VW in relation to unwanted and unwelcome conduct. What does this decision tell us? Some might think that it only stated the obvious, and that the only surprise is that it took up so much tribunal time. But there is an important point…

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Mind Your Language: Polyglot Personnel Problems

10th March 2016

Few employers nowadays would be so unaware of race discrimination legislation, or so indifferent to it, that they would instruct employees whose first language was not English not to speak in that language at work. At least not without a very good reason. A claim for discrimination (less favourable treatment) or harassment (violation of workplace dignity) might generate language of an entirely different nature… So what might amount to a very good reason? “Making others feel excluded” might tick the right box here, as long as this related to communication about work related issues during work time. It is plain common sense that if Polish employees converse with each other in Polish during the lunch hour, this would hardly justify a manager’s reprimand or a complaint from an excluded colleague. What about workplace security? A recent case in the Employment Appeal Tribunal, Kelly v Covance Laboratories, addressed that very issue. The company worked in animal testing and was rightly concerned to protect itself against terrorist infiltration. It became suspicious of K, a new recruit of Russian nationality, when she was overheard having long conversations in Russian on her mobile phone in the office toilets. She was warned not to speak Russian at work, so that any conversations she had in the workplace could be understood by English speaking managers. In due course, facing a capability meeting and a disciplinary process for undisclosed criminal convictions, K resigned and brought claims for discrimination and harassment. The claims failed. Although the instruction not…

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Online Selling and Dispute Resolution: a mandatory link

5th February 2016

Do you run a business selling goods or services online? You do? OK then, did you know that with effect from 9 January 2016, your website must carry a link to the EU Commission’s Online Dispute Resolution platform? You didn’t? Well, you may not be alone, and you will probably be curious to know more. The explanation lies in the Alternative Dispute Resolution for Consumer Disputes Regulations 2015;, the relevant provisions coming into force on 9 January 2016. On pages 4&5, we may note the formula “the trader must provide a link to the ODR platform”. What exactly is the ODR platform, then? The definition is to be found on page 2: – “a European online dispute resolution platform established under Article 5 of Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute resolution for consumer disputes”. Here is the link to the ODR – only too pleased to help. Now it’s over to you and your website designers. Please feel free to let us know if you need any further legal overhaul for your online terms or anything related. http://ec.europa.eu/consumers/odr/ You may, of course, be wondering why you have not been required to link to the Pre-Action Conduct Practice Direction of the Civil Procedure Rules of England & Wales, a good practical source of information about dispute resolution and how desirable it is. You probably won’t be alone. But that’s a question to raise with a politician, not a…

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Private Email at Work: Green Light (to snoop) or Red Herring?

25th January 2016

From an employment law perspective, what are we to make of the 12 January 2016 decision in Barbulescu v Romania, which has been proclaimed in the more excitable areas of the media as a green light for employers to snoop on private email at work? Let’s take a few steps back. Mr Barbulescu was dismissed on 1 August 2007. His first instance challenge to the dismissal failed, and his appeal against that decision was dismissed on 17 June 2008. So he took Romania to the European Court of Human Rights on 15 December 2008, leading to the present decision over 7 years later. Mr Barbulescu’s employer had internal regulations prohibiting use of company resources for personal purposes. In defiance of those regulations, he was shown (after 8 days’ company monitoring) to have used his company Yahoo Messenger account for personal purposes. He claimed he did so only for professional purposes. The company showed him written evidence of his wrongdoing and dismissed him. So after breaching company rules, being found out, lying to his employer and troubling the Romanian courts to no avail, Mr Barbulescu chose to take his native country to an external court, citing Article 8 of the European Convention on Human Rights (“dismissal based on a breach of privacy”) and Article 6 (“unfair proceedings before domestic courts”). With the latter being found to be manifestly ill founded, what would the ECHR make of the former? The answer: although Article 8 was applicable, because the employer had engaged Mr…

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