Technician blocked from poaching former employer's clients

A computer technician has been ordered to surrender confidential information retained from his former employer, which could be used to undercut and poach its customers.

The defendant worked for the IT support company Iconology Ltd since 2013.

In 2020, the defendant was in talks to purchase equity and become a director. A verbal agreement was made, and one of Iconology’s existing directors advised the defendant to set up another company through which to hold the shares.

However, he was not made a director, and the relationship between the two parties deteriorated.

The defendant resigned, and Iconology discovered he was speaking to its customers about moving to his new company.

There were no restrictive covenants in the defendant’s contract, and he refused to sign a non-compete agreement.

Iconology applied for an interim injunction to prevent the defendant and his new company from using confidential information obtained during his employment.

A photograph of a spreadsheet of Iconology’s clients and other information was found in the defendant’s internet storage account.

Iconology claimed it was evidence of a plan to undercut its prices and pointed out that all but two customers on the list had left to join the defendant's company.

He said it was normal for such photographs to be taken and that it was how senior management communicated with each other.

The defendant also said that Iconology’s customers had been dissatisfied and were looking for new IT support providers.

Iconology presented a contract between the defendant's company and one of its customers – a direct copy of the contracts they used.

The High Court ruled in favour of Iconology. It noted that there was a wide range of factual disputes between the parties, but from the chronology of events, Iconology appeared to have a credible case and had identified a serious question to be tried.

A significant number of customers had moved to his new company during or after the defendant’s employment, and there were noticeable gaps in his explanation of how that had happened.

It was unlikely that the customers who had defected would return to Iconology, and the business loss would be quantifiable in damages.

It would be more difficult to quantify the harm that would be caused by the continued use of confidential information or trade secrets.

It was also unclear to what extent the defendant and his company would be able to meet an award of damages.

The balance of convenience lies in granting an injunction to prevent confidential information from Iconology being used and to require its delivery.

It was not appropriate to grant an injunction in respect of the customers who had already moved to the defendant's company.

They depended on the services, and there was no evidence that they would return to Iconology if prevented from using his company.

Please contact us if you would like advice about protecting your business or any aspect of employment law.