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Copyright © 2019 BarrCo Limited.

 

All rights reserved. BarrCo Solicitors is the trading name of BarrCo Limited.

Authorised and Regulated by the Solicitors Regulation Authority: 551420 :

Registered Company in England and Wales: 7346373

No duty to disclose intention to compete

June 8, 2017

 

 

Two moderately senior employees planned to set up a new company in competition with their employer after their restrictive covenants expired.  When questioned by their employer (after handing in their resignation) they lied about their intentions.  The employer sought an injunction based on misuse of confidential information, and also upon breach of the duty to answer questions truthfully.

The judge held that whilst there was a general duty to answer questions truthfully, he was "reluctant to hold" that a departing employee is under a contractual obligation to explain his own confidential plans to set up in lawful competition.  The situation might have been different if the employees were sufficiently senior to owe fiduciary duties to their employer.

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