‘Confidentiality The contractual relationship between Dyson and yourself is founded on trust. At any time during or after the termination of your employment you agree not to disclose to any person or use for your own purposes other than those of the Company, any private, confidential or secret information specific to the business of the Company. Any breach of this trust by you, such as the unauthorised disclosure to a third party of confidential material relating to the business of the Company will result in disciplinary action and/or civil proceedings to restrain you from disclosing or making use of the information without authority, or for damages if loss to the Company results from the unauthorised disclosure. Loyalty and other employment During the term of this agreement you shall use your reasonable endeavours to promote the interests of, and shall act in good faith in relation to, the Company. In addition you shall not (unless otherwise agreed by the Company) undertake any other business or profession or become an employee or agent of any other firm, company or other person. … Obligations after employment Definitions used in this clause are set out in the Schedule to this Agreement. 1. You will not for the Restricted Period: a) so as to compete with the Company or any Group Company, carry on or be engaged, concerned or interested in any Restricted Business … 4. Each of the restrictions above shall apply whether you act as principal or agent and whether alone or jointly, with or as a director, manager, partner, shareholder, employee or consultant or any other person, and whether you act directly or indirectly. 5. You agree that if any person approaches you in connection with offering you employment which is or potentially may be in competition with the Company or any Group Company then you will immediately inform the Company of that approach. In addition, you will disclose to any potential new employer before accepting such an offer of employment the extent of your notice period and the obligations after employment which you owe to the Company and any Group Company and will confirm to the Company that you have provided that notification.’
‘ “Confidential Product Information”: means any confidential information relating to: (i) any product or plans for a product not yet launched by the Relevant Date; (ii) current or future product strategy; (iii) product design; or (iv) the marketing or sales strategy of any product, in each case excluding information in the public domain other than as a result of a breach by you of your obligations under this Agreement; “Relevant Date”: means the Termination Date, or if earlier, the date from which you were required not to attend work during your notice period; … “Relevant Period”: means the twelve months immediately preceding the Relevant Date; “Restricted Business”: means any business which is similar to any business being carried on by the Company or any Group Company at the Termination Date and with which you were either: (i) involved at any time during the Relevant Period; or (ii) materially informed about or had responsibility for during the Relevant Period; or (iii) in circumstances where a new product is planned to be launched, involved in the planning, research, development or manufacture of that product in the 24 months prior to the Relevant Date and as a result of that involvement still have Confidential Product Information; … “Restricted Period”: means the period of 12 months following the Relevant Date; and “Termination Date”: means the date on which your employment with the Company ends.’
‘… Accordingly, confidentiality is central to what Dyson does. We rely upon confidential information for our research and development work, in particular for the design and manufacture of our products, to keep ahead of our competitors and ensure the long-term success of the Dyson business. Moreover, much of Dyson’s research and development work is conducted over an extremely long time-frame. In extreme cases, a particular product might take more than a decade from initial idea to launch, and it is essential that we maintain commercial confidentiality at every stage of that process … we need to ensure that competitors do not discover our plans or products before we are ready to launch them in public. … Further, our approach involves an element of surprise. We enter markets that may be unconnected with previous markets we have developed. We arrive at an innovative product and capture consumers’ imagination before the competition can react. For this reason, knowledge of our intention to enter a new market is a key aspect of our confidential information.’
‘74. Nor do I accept that sub-clause (iii) [of the definition of ‘Restricted Business’] was only intended to apply if “proof of concept” approval had been given, or specific plans had been laid for the launch of a finished product onto the market by the Termination Date. The clause makes no mention of “proof of concept” or any particular marketing stage at all. Instead, I read it as designed to apply at any time from the point in time at which a potential product was conceived (by DTL) until it was actually made available to the market (by another Dyson Group company), provided that Mr Pellerey had been involved with some stage of that development process in the 24 months prior to the Relevant Date, and provided also that he still had Confidential Product Information (as defined) relating to it.’
‘84. Applying these principles, I have no doubt whatever that at the time of entering into the Employment Contract the parties must have envisaged that Mr Pellerey’s employment would involve him being exposed on a daily basis to highly confidential information regarding the research and development of existing and potential products by DTL that could properly be described as trade secrets or information of equivalent confidentiality. I have set out in paragraphs 33 and 34 above the evidence of Mr Bowen and Mr Clothier as to the nature of DTL’s business and the Dyson Group’s strict approach to confidentiality and the practical steps taken to preserve it. That approach was not materially challenged and I accept it. Given the manifest importance to DTL of the confidential information concerning the research and development being undertaken by its staff, and the steps taken to protect that information, there can be no doubt that DTL had a legitimate business interest in such information that it was entitled to protect by a suitable covenant restraining Mr Pellerey from engaging in a competitive activity after termination of his employment. … 112. … I consider that DTL has established that the restraint sought to be imposed on Mr Pellerey in the Employment Contract was no wider than was, at the date of the contract, reasonably necessary to protect DTL’s legitimate commercial interests in the trade secrets and equivalent confidential information relating to its business that both parties might reasonably have anticipated Mr Pellerey would acquire in the course of his employment. The covenant was therefore in the interests of both parties and not contrary to the public interest, and hence it is enforceable against Mr Pellerey.’
‘115. There can, I think, be no real doubt that the research and development activities of Tesla are a Restricted Business within the meaning of the Employment Contract. At the time at which Mr Pellerey resigned, both DTL and Tesla were engaged in the business of designing electric cars, and Mr Pellerey had been involved to the requisite degree in Project E at DTL. 116. I also consider that the fact that Project E is less advanced than Tesla’s established car business is not relevant to the question of whether Mr Pellerey would be competing with DTL in his new job at Tesla. I accept Mr Nicholls’ argument that since DTL commenced work on Project E, DTL and Tesla have been business rivals, irrespective of the respective stages which their research and development have reached. Ultimately, each company is striving to design a superior electric car that will sell better than the other’s product.’
‘Even if the covenant is held to be reasonable, the court will then finally decide whether as a matter of discretion, the injunctive relief sought should in all the circumstances be granted, having regard, amongst other things, to its reasonableness as at the time of trial.’
‘The effect of the authorities can be summarised as follows: (1) Express or implied negative covenants will in general be enforced by injunction without proof of damage by the plaintiff. (2) The principle does not depend on whether the plaintiff is a person or a corporation. The ready availability of the remedy is not the consequence of equity’s regard for the plaintiff’s personal feelings, but of equity’s perception that it is unconscionable for the defendant to ignore his bargain. (3) Although absence of damage to the plaintiff is not in general a bar to relief, there may be exceptional cases where the granting of an injunction would be so prejudicial to a defendant and cause him such hardship that it would be unconscionable for the plaintiff to be given injunctive relief if he could not prove damage. In such cases an injunction will be refused and the plaintiff will be awarded nominal damages.’
‘I would accept that the prima facie position is that an injunction should be granted, so the legal burden is on the defendant to show why it should not.’
‘132. Thirdly, whilst I think that a good deal of the confidential information to which Mr Pellerey had access during his limited time on Project E tended to be of a preliminary nature, and I formed the impression that Mr Clothier and Mr Bowen were apt to over-state the importance of some of the peripheral matters, there was, nevertheless, a core of information generated in the period of time that Mr Pellerey was engaged on Project E that must on any view qualify as confidential information akin to a trade secret. Although many of the projections and calculations of the performance of various motors and hypothetical vehicles which Mr Pellerey performed or contributed to could be replicated by use of a similar computer programme, the particular targets set by the DTL team and Sir James Dyson for the range and performance of the car, the body shape and size, the proposals for the air cooling of the motor and heating of the battery, and an unusual idea for design of the car’s wheels are commercially sensitive matters known only to DTL. 133. Even allowing for the Dyson Group’s preoccupation with secrecy, the very fact that DTL went to considerable efforts to keep these matters confidential to the Project E personnel must lend weight to the arguments that disclosure of these matters could cause significant harm to DTL and the Dyson group. Whilst (for obvious reasons) I can have no direct evidence of what would happen if these details were revealed to Tesla, I also have no real basis upon which to discount the views of Mr Clothier and Mr Bowen as to the damage that might be done to the business of DTL and the Dyson Group if that were to occur. In this respect, as Lord Neuberger accepted in Lawrence, the onus must be on Mr Pellerey to persuade me that I can reach a reliable conclusion that such information would be of no use to Tesla and that DTL would suffer no real harm were the information to be disclosed. I am not so persuaded. 134. Moreover, and picking up the main point made by Mr Nicholls in response to this issue, it would simply be impossible to quantify the harm that would be caused to DTL were any such disclosure to take place. In those circumstances I do not think that the prospect of recovering damages for breach of confidence provides a fair or adequate substitute for the grant of an injunction to prevent – for a limited period – the situation existing in which inadvertent disclosure and consequent harm is most likely to take place.’
‘136. Finally, although I have considerable sympathy for the predicament that Mr Pellerey finds himself in, I cannot disregard the fact that Mr Pellerey is largely the author of his own misfortune. As I shall indicate below, I do think that Mr Pellerey acted unwisely and breached his contractual duties to DTL when failing to inform it on27 May 2015 when he was asked to work on Project E (or even after the security briefing on4 June 2015 ) that he had received and had accepted a conditional job offer from Tesla. Whatever Mr Pellerey’s concerns at the time, I do not accept the suggestion that DTL would have held that fact against him, and more importantly, had Mr Pellerey told DTL of the job offer (which he did when it suited him to do so in relation to the offer from the CCTV company in October 2014) he would not have become involved with Project E, and DTL would have been unable to prevent him leaving to work for Tesla when his job offer was confirmed.’
‘163. … But if, as a result of the injunction to restrain Mr Pellerey from working for Tesla, Mr Pellerey is not placed in such an environment, then I see no basis upon which to grant an injunction against him. 164. I accept, of course, that the position might change were Mr Pellerey to take up employment with Tesla or another electric car manufacturer after15 June 2016 , but if that were to occur, a court would have to look at the circumstances afresh at that stage.’
‘When we look into the dictionaries as to the meaning of the word “business,” I do not think they throw much light upon it. The word means almost anything which is an occupation, as distinguished from a pleasure – anything which is an occupation or duty which requires attention is a business – I do not think we can get much aid from the dictionary. We must look at the words in the ordinary sense, and we must look at the object of the covenant; and, looking at both, I have no hesitation in saying that this is clearly within the words and within the object of the covenant.’
‘The Staff Drive Motor Engineer reports into the Propulsion Team and will interact heavily with the Electromagnetic Design and Motor Control teams. He will be heavily involved in all design aspects of the electric motor mechanical design and participate in defining the optimal parameters for the electromagnetic design of the drive motor. Working with the manufacturing teams he will assist with vendor, material and assembly selection for creation of early and pre-production prototypes. The Drive Motor Engineer will be responsible for dynamic mechanical simulation of new and existing motor concepts, and perform combination of Electro-Magnetic and structural acoustic analysis to predict and optimize motor designs for NVH [noise, vibration and harshness] and durability and assist the [Electromagnetic] design team to achieve the best overall design for NVH.’
‘119. But I do not accept Mr Sims’ argument that Mr Pellerey’s intended job at Tesla would not result in him competing with DTL because it would involve acoustic noise work rather than work on torque/speed curves and drive-cycle simulations. The technical evidence that I heard from both Mr Clothier [DTL’s director of Technical Research] and Mr Pellerey made it very clear that the development of an electric car is a complex undertaking, in which many aspects of the design and specification of the car are inter-related and choices in one area have an implication for other aspects of the design. Any person contributing to one aspect of the project does not work in isolation from other contributors and his work is very likely to have an effect upon the overall design. Mr Pellerey’s evidence on this issue was typified by the following exchange ….’
‘If parties, for valuable consideration, with their eyes open, contract that a particular thing shall not be done, all that a Court of Equity has to do is to say, by way of injunction, that which the parties have already said by way of covenant, that the thing shall not be done; and in such a case the injunction does nothing more than give the sanction of the process of the Court to that which already is the contract between the parties. It is not then a question of the balance of convenience or inconvenience, or of the amount of damage or of injury – it is the specific performance, by the Court, of that negative bargain which the parties have made, with their eyes open, between themselves.’
‘Although absence of damage to the plaintiff is not in general a bar to relief, there may be exceptional cases where the granting of an injunction would be so prejudicial to a defendant and cause him such hardship that it would be unconscionable for the plaintiff to be given injunctive relief if he could not prove damage. In such cases an injunction will be refused and the plaintiff will be awarded nominal damages.’
‘The other case referred to, that of litigation as to a secret process, where the effect of publicity would be to destroy the subject-matter, illustrates a case which stands on a different footing. There it may well be that justice could not be done at all if it had to be done in public. As the paramount object must always be to do justice, the general rule as to publicity, after all only a means to an end, must accordingly yield.’