Case No. KB-2025-003035 - [2025] EWHC 2654 (KB)

As I have indicated, I have endeavoured to limit my account of the factual background to matters that are not seriously in dispute. Even if I turn out to be wrong about any of the facts, the claimant’s detailed evidence is sufficient at this stage to support the proposition that there is a serious issue to be tried.

It will be a matter for the trial judge to determine whether the post-termination obligations issued to Mr Marchant and Mrs Hampton became part of their terms and conditions of employment. Given that they continued to work for the claimant after the issue of fresh covenants knowing that the claimant had issued them, there is a serious issue to be tried in this regard.

In any event, as Mr Northall sets out in his skeleton argument, the contracts of employment contained implied duties of loyalty and good faith (Attorney-General v Blake [1998] 2 WLR 805; Kynixa Limited v Hynes and others [2008] EWHC 1495 (QB), para 283). There is sufficient material on which the Court may conclude at this stage that there is a serious issue to be tried as to whether the post-termination obligations have contractual force. The claimant easily surmounts that hurdle.

As Mr Northall pointed out, the defendants’ case at this stage is not that they have not solicited, and do not wish to solicit, the claimant’s clients. Their case is that an interim injunction in the terms sought would damage their nascent business and cause them personal financial hardship by blocking them from soliciting certain landlords. They contend that the restraints would be unduly anti-competitive. Given that they appear both to have solicited the claimant’s restricted clients and to regard such action as warranted, I accept that there is a serious issue to be tried as to whether they have breached, and will continue to breach unless restrained by the Court, the claimant’s post-termination covenants.

It is not in dispute that, at trial, the claimant will need to demonstrate that the post-termination obligations are not more stringent than is necessary to protect the claimant’s legitimate business interests (TFS Derivatives Ltd v Morgan [2005] IRLR 246, paras 37-8). The defendants submit that the obligations are not necessary because the claimant is so large that solicitation of its clients would cause no real loss to its business overall. I reject that submission. The claimant is entitled to protect its business with its client base and with longstanding landlords such as those solicited by the defendants. There is at the very least a serious issue to be tried in this respect.

Overall, although draft particulars of claim have not been provided, Mr Northall made clear both in writing and orally that the claimant alleges an unlawful conspiracy between Mr Marchant and Mrs Hampton to solicit the claimant’s clients. On the evidence and submissions before me, there is plainly a serious issue to be tried in that regard.

This aspect of the American Cyanamid test is met.