An injunction is a legal order issued by a civil court that requires or prevents certain actions by one or more parties. This legal remedy is a robust tool for safeguarding your business interests. It can force individuals to undertake specific actions, such as surrendering a confidential client list or refraining from actions that may inflict harm, such as making false and potentially defamatory statements.
There are many types of injunctions; however, in this article, we focus on the use of ‘springboard injunctions’ in UK employment law, explaining what they are, when employers can obtain them and how long they last, as well as other practical considerations you should be aware of.
Summary
This article covers:
- A springboard injunction is a court order preventing a former employee from unfairly profiting from a ‘head start’ gained through an unlawful act, such as misusing confidential information.
- They are usually employed in situations that involve the misuse of confidential information or trade secrets; however, such injunctions may be granted where there was a mass employee defection to another company or a serious breach of an employment contract.
- To succeed with an application for a springboard injunction, you will need robust evidence of the unlawful conduct and the unfair advantage gained
- A springboard injunction is temporary and only lasts as long as it is necessary to eliminate the unfair competitive advantage.
- Failure to comply with a springboard injunction is contempt of court, punishable by an unlimited fine and/or imprisonment.
What is a Springboard Injunction?
A springboard injunction is a court order that prevents a former employee from unfairly profiting from a ‘head start’ or ‘springboard’ gained through an unlawful act, such as misusing confidential information or trade secrets from their previous employer.
While general injunctions aim to prevent or stop unlawful acts, springboard injunctions serve a different purpose. Rather than addressing the wrongdoing itself, their focus is on levelling the playing field between the parties after the unlawful act has occurred. They do this by placing the employee under a ‘special disability’ designed to remove any unfair competitive advantage gained. They are useful when a simple monetary award cannot adequately compensate the employer for the harm caused by the unfair competitive advantage.
In instances where a standard confidentiality injunction may fall short of safeguarding the employer, particularly when the information has already been used and is no longer deemed confidential, an employer alleging the misuse of confidential information or breach of a restrictive covenant by a former employee might opt to pursue a springboard injunction for relief.
Springboard injunctions can take many forms, such as preventing a competing business from hiring or retaining key staff or a ban on dealing with customers until the unlawful head start has been nullified.
When are Springboard Injunctions Used?
The most common and traditional application of this type of injunction concerns the misuse of confidential information or trade secrets. This remains true even if the information has later entered the public domain, as the wrongdoer may still hold an unfair advantage gained from accessing and using it unlawfully.
Typical examples include:
- A former employee or director taking a confidential client list or customer database and using it to solicit business for a new, competing enterprise; or
- An employee using trade secrets, such as confidential production methods, pricing data, or other proprietary information, to give a new business an unfair competitive edge.
Although this is the most established scenario, courts have also extended the application of springboard injunctions to less traditional situations, such as:
- Coordinated Employee Defection to another Company or Mass Poaching: Where a group of senior employees coordinate a mass resignation to establish a rival business, using their access to confidential information and influence to recruit colleagues and solicit clients. In such cases, a springboard injunction may be used to neutralise the unfair head start obtained through the coordinated breach.
- Serious Breaches of Employment Contracts: The court may contemplate a springboard injunction to neutralise an advantage acquired through a breach of an employment contract. This could occur, for example, on a violation of a non-compete clause that gives the former employee or their new employer an unlawful competitive advantage. Where restrictive covenants are either unenforceable or insufficient to prevent harm, a springboard injunction may be granted to supplement or replace them.
It is crucial to understand that a springboard injunction is an equitable remedy designed not to punish unlawful conduct, but to neutralise any unfair advantage a former employee (or competitor) has gained through unlawful means.
Legal Test/Requirements
To succeed in obtaining a springboard injunction, the applicant must satisfy the court that the following conditions are met:
- There has been unlawful behaviour by the former employee, usually involving the misuse of confidential information or another breach of duty. Mere possession of confidential information is not sufficient; use or imminent misuse must be established to justify a springboard injunction. If only possession is shown, a standard confidentiality injunction may be more appropriate.
- The former employee has gained an unfair advantage over the former employer as a result of this unlawful activity. The advantage must be directly linked to the misconduct and place the defendant in a position to compete more quickly, cheaply, or effectively than would have otherwise been possible.
- The nature and period of the competitive advantage are more than fleeting or short-term. The harm must go beyond ordinary commercial competition and should be a consequence of the unlawful activity, not market dynamics.
- The advantage remains in effect at the date the springboard injunction is sought and will continue to cause serious economic harm to the applicant unless the relief is provided.
Even if the above requirements are met, the court will assess:
- Whether damages (monetary compensation) would be an adequate remedy. A springboard injunction is more likely to be granted where damages are inadequate or difficult to quantify.
- The balance of convenience, ensuring that the injunction would not be disproportionately burdensome.
- The applicant’s conduct, including any delays in applying (which may weaken their position).
Duration of a Springboard Injunction
The length of a springboard injunction is dependent on the specific circumstances surrounding each case. These injunctions are designed to address an unfair advantage and are typically granted for a specified duration rather than indefinitely, as a springboard advantage cannot persist forever.
Occasionally, courts have set a one-year term for springboard relief; however, this should not be seen as the standard, as such injunctions are often granted for much shorter periods.
When assessing the duration and scope of a springboard injunction, courts may consider various factors, including:
- The length of the unlawful advantage relative to the harm caused to the claimant
- The amount of data or information misappropriated by the former employee
- Case-specific elements, including mitigating and aggravating factors
In cases involving a team move, the court may analyse factors such as the time required to train a new team, the recruitment of junior versus senior staff, the immediate and long-term consequences of a mass team exit, and the potential repercussions for the organisation.
It is vital to understand that the severity of the breach and the conduct of the defendant do not influence the length of the injunction; rather, emphasis is placed on the impact of the breach and the extent to which the defendant has gained an illegitimate competitive advantage at the claimant’s expense.
Case Law on Springboard Injunctions
Springboard injunctions are generally used in cases involving the misuse of confidential information, especially when employees take proprietary data such as customer databases, business models, and pricing lists when they leave. In the case of Bullivant v Ellis, Mr Ellis, a senior employee, left his employer’s firm to start a competing business, taking confidential information with him, including a card index with the contact details of his employer’s clients. He then used this information to directly approach those clients for competition. The Court of Appeal ruled that a springboard injunction could be granted to prevent Mr Ellis from contacting the individuals on the stolen card index, deciding that the unfair advantage gained was not mitigated by the fact that some information was publicly available, because the employee had gained an ‘unfair start’. This case confirmed that a springboard injunction is necessary to prevent an employee from benefiting from the misuse of confidential information, even if some of the information could have been lawfully obtained.
In the context of a coordinated team defection from one company to another, to the detriment of the former employer, a key case is UBS Wealth Management Ltd v Vestra Wealth LLP & Others (2008), which involved several ex-employees who, in secret and in breach of their obligations to their employer, coordinated their defection to join a new firm established by a former senior employee at UBS.
The court, in that case, clarified that springboard relief is not confined to instances where ex-employees are poised to misuse confidential information obtained during their employment. It is also applicable to avert any potential or ongoing economic loss to a former employer resulting from former staff members exploiting an unfair advantage. Consequently, an injunction was granted until trial, preventing Vestra from soliciting or engaging with any UBS client and from approaching any UBS employee who had not yet resigned.
The High Court case of QBE Management Services v Dymoke and Others QBE Management Services (UK) Ltd v Dymoke & Ors [2012] EWHC 80 (QB) (27 January 2012) is a more recent illustration of a successful application for a springboard injunction. In this case, former employees had covertly planned to launch a competing business while still working at QBE, using the company's confidential information and attempting to lure away colleagues and clients. The court found this to be a clear-cut example justifying springboard relief. It issued a 12-month injunction from the date of their resignation to neutralise the unfair advantage they had gained through their misconduct.
Remedies and Consequences
The specific remedies granted under a springboard injunction are discretionary and depend on the circumstances of each case; however, they are often used in conjunction with other forms of relief, such as damages.
Typical remedies include restrictions on using the confidential information or soliciting clients and staff, as well as forbidding the employee from competing with their former employer for a set period of time. The court can also order the employee to return any confidential information or client lists they improperly took, or to destroy them.
Failure to comply with a springboard injunction can result in a finding of contempt of court, leading to severe consequences. These include a large fine or imprisonment for up to two years. The court can also take other measures, such as ordering the confiscation of assets.
Practical Guidance for Employers
If you are concerned about any confidential information within your business being wrongfully used and believe a springboard injunction may be necessary to safeguard your business interests, it is crucial to act promptly in filing for it. Any delay could adversely affect the likelihood of you obtaining the injunction – in fact, case law has illustrated that the courts may reject applications where the claimants have unduly delayed taking action to mitigate the alleged misconduct.
Additionally, it is vital to recognise that success hinges on the employer providing robust evidence of the unlawful conduct and the unfair advantage gained. You will need to gather evidence that the defendant gained an unfair advantage and that the advantage will continue to cause your business harm, as well as proof of unlawful behaviour. This may include electronic communications, witness statements or expert opinions. Without direct evidence, the court may refuse the injunction. This is because the courts might not be willing to base their decision on inferences drawn from primary facts.
Furthermore, you should be confident in the strength of your case and ensure that the application is limited to what is essential to protect your business from the defendants’ unlawful actions. The objective of a springboard injunction is to prevent a head start rather than putting the claimant in a more favourable position than they would have been had the breach not occurred. As a result, claimants have, in the past, been ordered to pay damages to the defendant when the injunction requested exceeds what is necessary for the adequate protection of the claimant’s legitimate rights.
Practical Guidance For Employees
Breaching a restrictive covenant or misusing confidential information can carry serious personal and financial consequences. If your former employer obtains a springboard injunction against you, it could:
- Effectively put your new business on hold
- Prevent you from taking a new job for a specific duration
- Result in a court order to pay a substantial portion of your former employer’s legal costs.
To minimise risk, it’s crucial to avoid taking any confidential information - even if it seems harmless - and to return all company devices, documents and other property when your employment ends. If you have used any personal devices for work, make sure that any confidential company information stored on them has been irretrievably deleted.
If your contract includes restrictive covenants (such as non-compete, non-solicitation, or confidentiality clauses), it is strongly advisable to consult an employment lawyer before planning your departure. This ensures your actions are lawful and protects your future career or business plans.
If you are served with a springboard injunction, compliance is essential. These orders can be disruptive and stressful, particularly if they limit your ability to trade or earn a living. Seeking immediate legal advice will help you understand the scope and terms of the injunction, identify any potential defences and assess whether the order is excessive or unlawfully restrictive.
Protecting Your Business
Springboard injunctions can be a powerful tool to prevent former employees from unlawfully gaining a head start and engaging in unfair competition. To secure such an injunction, however, it is important to present a strong case and ensure the application is properly drafted.
Our expert injunction lawyers act promptly to protect businesses from unfair competition. We can:
- Assess the merits of your case
- Advise on whether a springboard injunction is appropriate for your circumstances.
- Prepare and submit urgent injunction applications where necessary
We also offer strategic advice and representation to individuals facing springboard injunctions or disputes involving restrictive covenants. For further information and advice, contact our experienced injunction lawyers by calling 0330 173 6986 or emailing us.
FAQ
What is a springboard injunction?
A springboard injunction is a court order designed to prevent a former employee from gaining an unfair competitive advantage due to unlawful conduct, such as the misuse of confidential information or a breach of fiduciary duty.
How long does a springboard injunction last?
A springboard injunction is temporary and only lasts as long as it is necessary to eliminate the unfair competitive advantage. The courts determine the duration on a case-by-case basis.
When can an employer apply for a springboard injunction?
An employer can apply for a springboard injunction when they can demonstrate that:
- The former employee engaged in unlawful conduct, such as the misuse of confidential data,
- The conduct provided a continuing unfair advantage, and
- There is a real risk of economic harm to the employer unless restrained.
What happens if you breach a springboard injunction?
Breaching a springboard injunction is a serious offence and can lead to a finding of contempt of court, punishable by an unlimited fine and/or imprisonment of up to two years.
Is a springboard injunction the same as a non-compete clause?
No, a springboard injunction is not the same as a non-compete clause. A non-compete clause is a contractual agreement that prohibits a former employee from competing for a set period of time, irrespective of wrongdoing, while a springboard injunction is a court order that removes or limits the unfair advantage a former employee gained through the misuse of confidential information.
