Monday, November 16th, 2009
A company is to receive compensation from a former director who set up a rival firm.
The company provided engineering and technical personnel for clients including the United States Defence Department. Its operations director, who was also an employee of the company, was responsible for the management of the business.
While still working for the company, the director set up a rival firm. He didn’t tell the company that he had done so. He also approached some of the company’s customers and took confidential documents.
The company claimed damages for conspiracy, breach of contract and breach of fiduciary duty – that is, the duty directors have to act in the best interest of the company employing them.
The court held that once he had resigned, the director was entitled to compete against his former company in any way he chose. However, he had been in breach of his duty because while working for his former company, he had failed to alert them that he was about to set up a rival business.
He had also taken documents and approached customers.
The court granted an order for damages to be assessed and also granted an injunction preventing the director from providing rival services until a year after his resignation.
© Copyright 2009 Burt Brill & Cardens Solicitors