Restraint of Trade Clause in Contract – Employee Prohibited from Using Information from Previous Employer

This case is one of a few Irish reported cases on preventing employees unfairly taking a company’s business elsewhere while working for a direct competitor.

Gemma Allen commenced work as a recruitment consultant with Brightwater Recruitment on 7th July 2003. She left 16 months later on the 29th November 2004.

Restraint of Trade Clause

Her contract of employment with Brightwater contained a restraint of trade clause. This provided that she should not for 6 months after the termination of her employment

•Solicit business from any client of Brightwater

•Solicit a candidate who had been placed by Brightwater, or

•Solicit someone who was on Brightwater’s books looking for a job.
Upon leaving Brightwater, Ms Allen found another job with a different recruitment company namely Robert Walters Limited who were in direct competition with Brightwater.
Brightwater alleged that upon her departure from its employment, Ms Allen removed client information from its databases in order to assist her in her new role with Robert Walters Limited. It further alleged that Ms Allen contacted a number of key clients of Brightwater with a view to placing candidates with them.
Brightwater sought an interlocutory injunction seeking to restrain these activities of Ms Allen and also the activities of her new employer which it alleged were occurring in contravention of the terms of the restraint of trade clause.
Both Ms Allen and her new employer voluntarily gave undertakings to the Court in the following terms:
1.To refrain from directly or indirectly disclosing any information concerning Brightwater’s business, finances, dealings, transactions or other affairs which might have come to the knowledge of Ms Allen during the course of her employment.

2.To refrain from using any confidential information and/or using Brightwater’s property including all documents, correspondence and papers whether in hard copy or computer format belonging to the company.

3.To surrender and deliver to Brightwater all its property including all documents, correspondence and papers whether in hard copy or in computer format belonging to it.

4.To furnish a list of all information and/ or documentation whether in hard or soft copy concerning Brightwater’s business, finances, dealings, transactions or other affairs disclosed and / or divulged by the defendants since Ms. Allen left Brightwater.

5.To deliver a list of persons canvassed, solicited, approached and/or placed by the defendants on or since Gemma Allen’s departure from Brightwater’s employment that were placed on Brightwater’s booked and are recruited by Brightwater and;

6.To furnish a list of all Brightwater’s property whether in hard or soft copy, taken by the defendants on or since Ms. Allen’s departure from Brightwater.
However, a number of months after these undertakings were given to the Court, Brightwater claimed that the defendants had in fact dealings with named clients which was clearly in breach of the Order of the High Court.
It sought an order of attachment against Ms Allen and the three named Directors of her new employer on the grounds that they were in breach of the undertakings given to the Court earlier in 2005.
 Brightwater also sought an order seizing the assets of the defendants and the Directors of the Company and fining them for contempt.
Ms. Justice Laffoy held that the plaintiff had established that there were in fact breaches of some of the Court Order in particular those that restrained Ms. Allen from canvassing firms which had been clients of Brightwater and restrained Robert Walters Limited from using her for that purpose.
Case: Brightwater Recruitment v Allen & Robert Walters Ltd, High Court, 2005 IEHC 155, 12/05/2005


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