“As Elias J. pointed out in Fishel the hallmark of a fiduciary is a single-minded duty of loyalty. The duty of loyalty in that context has a precise meaning: “namely the duty to act in the interests of another As mentioned, this is not a feature of an employment relationship. In the employment context, the duty of loyalty, although given the same label “is one where each party must have regard to the interests of the other, but not that either must subjugate his interests to those of the other. ”
“So how do we do that without blowing our cover? D”
“As well as me and Susan, I am looking at Steve for design and production and Jan for admin and accounts. Maybe Andy too as another editor/travelling reporter.”
“In general terms, it can be said that the duty of fidelity requires an employee not to engage in competitive activity. Nevertheless, it is legitimate for him to undertake competitive activity as soon as he ceases the employment (in the absence of effective post-termination covenants), and not all preparation for such future competitive activity will be a breach of his duty of loyalty. Where the boundary is to be drawn, in any particular case, between legitimate preparatory activity and illegitimate competitive activity, is often a difficult question.”
“27. This freedom to compete, once an employee has left, unrestrained by any enforceable covenant, carries with it a freedom to prepare for future activities, which the employee plans to undertake, once he has left. In Robb v. Green (q.v. supra) Hawkins J. concluded that a manager who had copied a list of customers was liable in damages for breach of an implied term not to use such information to the detriment of his employer. But he observed, in words echoed frequently thereafter, that each case would depend upon its own circumstances and there will be cases where an employee may legitimately canvas, issue circulars, have a place of business ready and hire employees (see page 15). The Court of Appeal made no observation suggesting disagreement when it affirmed Hawkins J.’s conclusion. The legitimacy of preparatory activity 28. The battle between employer and former employee, who has entered into competition with his former employer, is often concerned with where the line is to be drawn between legitimate preparation for future competition and competitive activity undertaken before the employee has left. This case has proved no exception. But in deciding on which side of the line Mr. Tunnard’s activities fall, it is important not to be beguiled into thinking that the mere fact that activities are preparatory to future competition will conclude the issues in a former employee’s favour. The authorities establish that no such clear line can be drawn between that which is legitimate and that which breaches an employee’s obligations.”
“For reasons which I have already explained, there is no room for doubt that the defendants have made unlawful use of material in which Sun Valley/Fields has a proprietary interest. But, as Nourse L.J. explained in Bullivant, that in itself is not enough to found a claim for “springboard” relief. Sun Valley also has to establish (a) that the defendants thereby gained unfair competitive advantage over Sun Valley “to use the words of Roxburgh J.” (an“unfair start”) and (b) as of today that advantage still exists and will continue to have effect unless the relief sought is granted. It is, therefore, necessary to consider on the evidence as it stands (and, of necessity, without the benefit of cross-examination) the extent to which the unlawful copying of Fields’ material assisted the defendants in starting up Fusion's business and in thereby shortening the start-up period. In undertaking this task, I must bear in mind that there was nothing unlawful in the individual defendants making use of their own expertise and experience in setting up in competition with Sun Valley/Fields immediately following their resignations. In those respects, a “seamless transaction” from Fields to Fusion was a legitimate aim which cannot found an application for “springboard” relief.”