First Global Locums Ltd & Ors v Cosias [2005] EWHC 1147 (QB)

Case No HX04X03002[2005] EWHC 1147 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London WC2A 2LLDate Tuesday 7 June 2005
Before
Bernard Livesey QC(sitting as a judge of the High Court)
Between
FIRST GLOBAL LOCUMS LTD & OTHERSClaimantsANDREW COSIASDefendant
Jeffrey Bacon, instructed by Max Bittel Greene of London N1 for claimantsRichard Alomo, instructed by Bart-Williams & Co, Ilford for defendant
JUDGMENT

Bernard Livesey QC:

[1]On an application made without notice to the defendant on 16 September 2004, Mr Justice Simon granted an order restraining the defendant(a) pursuant to the Protection of Harassment Act 1997 from acting in relation to the claimants in a number of respects and(b) from acting in breach of certain post termination covenants in his contract of employment with the first claimant.[2]The original order was continued with some variations by further orders and a speedy trial was ordered to take place. The trial took place between 11 and 14 April 2005 and requires the determination of the issue whether the interim orders given in the action were correctly made and in particular whether(a) the restraints pursuant to the Prevention of Harassment Act 1997 should be continued with liberty to apply, and(b) whether the restraints, imposed in respect of the post-determination restrictive covenants in his employment contract, were correctly made.[3]The factual background of this matter is as follows. First Global Locums Limited (“First Global”) is a small recruitment consultancy based in the City of London. It is involved principally in the supply of qualified social workers to third parties, who are mainly social services departments in local authorities in the Greater London area. The second to sixth claimants are all currently employed by it, the second and third claimants being the directors of the company.[4]The defendant also was employed by First Global from 6 October 2003 until he was summarily dismissed on 16 September 2004. It is common ground that his dismissal was in some way related to an incident which took place on 8 September 2004. The circumstances of this and a further incident on 16 September are in dispute. The defendant contends that the claimant had ulterior motives for making the decision to sack him.[5]I heard evidence at the trial both written and oral from the following: the second to sixth claimants in person, and also on the claimants’ behalf from Naraini Yunus, Aleksandra Halstead and Nabeela Adam. For the defence I heard evidence from Mr Cosias himself. It is appropriate that I express my views on the credibility of the witnesses at this stage.[6]In my judgment, the claimants and each of their supporting witnesses gave evidence in a measured, sensible, unemotional and entirely straightforward manner. The evidence was internally consistent. A contemporaneous note of the events of 8 September 2004 had been prepared by Ms Whynn, Mr Miller and Debbie Draper as an aide memoire;there was also a contemporaneous email from Mr Overgage (who did not give evidence) and a Police Complaint Report. The witness statements of those who gave evidence and their evidence before me was consistent, and in the case of Ms Whynn and Mr Miller, consistent with the contemporaneous documents. Mr Liddington was particularly impressive in his recall of events and apart from one matter, to which I will later refer, there was virtually nothing that could be said by counsel for the defendant in criticism of either him or any of them.[7]Mr Cosias, on the other hand, gave evidence in a manner which, although fluent and superficially plausible, was ‘glib’. His answers were given without thought and, in my judgment, without much regard for the truth. They betrayed the fact that he is not very intelligent and could not see that he was giving answers inconsistent with other answers he had given a minute or so earlier. I came to the very firm conclusion that he was producing answers without consideration whether their contents were correct and without caring whether they were true. I mention just four of the more glaring instances of this.[8]First of all, in his first sworn affidavit he “completely rejected” the assertion of Mr Liddington that he had had a disciplinary warning on 7 April 2004 (see below) and asserted that the allegation had been made to discredit him: he has now accepted that he did and indeed he relies on its existence to make a point. Secondly, in a witness statement which he had signed with a certificate of truth dated 6 January 2005 he asserted that he ‘still had no job’: this was contradicted by the late disclosure of a letter dated 20 December 2004 offering him employment as a Divisional Manager from 10 January 2005. Thirdly, there is evidence that on 17 September 2004, the day after his dismissal he had made an unsolicited telephone call to the NSPCC to complain that he had been concerned about the professional conduct of First Global, in that it had recruited to positions knowingly not having obtained references and check results from the Criminal Records Bureau; that this had been going on for some time and “when he made efforts to address this with [Ms Whynn] he was dismissed from his post”. He alleged in evidence to me that the telephone call had been made to the NSPCC during August 2004 (presumably to avoid the inference that he was making the allegation in retaliation for his dismissal). He was, however, dismissed only in September and his dismissal had absolutely nothing to do with the alleged ‘whistleblowing’. Fourthly, he made an untrue statement in the curriculum vitae which he supplied to First Global as to the length of time that he had worked for a previous employer, a firm known as BBT. He represented that he had worked there for two years when in fact he had worked there for only seven months.[9]In the result, I unhesitatingly accept the truth and accuracy of the evidence which was given by the second to sixth claimants and their witnesses and reject the evidence of Mr Cosias wherever that conflicts with theirs. In the light of this, the history of events which I am now going to set out comprises my findings of fact on the disputed evidence which I have heard.[10]At the material time, First Global carried out its business from office premises at 30 Cannon Street London EC4. The premises were shared office premises and First Global occupied space in an open plan office on the lower ground floor of the premises where its eight or so employees worked at individual desks. They shared this floor with employees of other companies and had the facility to make use of a meeting room and a boardroom at the premises should they have occasion to do so for private discussions or meetings.[11]On a previous occasion Mr Cosias’s behaviour had caused him to be issued with a formal warning. On 8 March 2004 in a meeting with Ms Whynn he completely lost his temper, stormed out of the boardroom, his voiced raised and aggressive in tone. Ms Whynn took no action but felt intimidated. On the following day he was extremely abusive and intimidating towards a fellow worker Paul Miller. Mr Miller did not formally complain because he regarded himself as being a very close friend of Mr Cosias, hoped that it would not happen again, and was fearful that a complaint might be detrimental to the working relationships within the company. However, the incident was witnessed by Amanda Beezley who reported it to Ms Whynn who took advice. An informal disciplinary hearing took place and a letter was sent on 7 April containing a formal warning, expressed to last for three months. At around this time Mr Cosias had suffered the breakdown of a long-term relationship and blamed his misbehaviour on stress. He assured the directors and told some of his fellow workers that he was undertaking anger management courses in order to deal with his problem.[12]Following this on 10 May Mr Cosias told Ms Whynn that he was going to make a formal complaint against Nabeela Adam and Amanda Beazley for ‘touching his bum’. He was told to make it in writing. Both Nabeela Adam and Amanda Beazley denied the allegations. The following day Mr Cosias indicated that he had second thoughts and said that he was withdrawing the allegations.[13]Apart from these three incidents it is apparent from a number of statements from each of the employees that Mr Cosias was an individual with variable and unpredictable moods. On some days he was good-humoured and a pleasure to work with. On others he was moody, prone to outbursts, tantrums and aggressive and abusive behaviour towards those in the office and to some of those to whom he spoke on the telephone.[14]Until 8 September 2004 Mr Cosias and Ms Whynn had worked together on what is described as the ‘social desk’. Their task had been the placing of qualified social workers with employers who required temporary cover from locums. The defendant had been off sick on the 6~ and 7th September and while he was away it happened that Ms Whynn returned from holiday and had a discussion with Mr Liddington as to how they might better organise the working practices on the social desk in order to improve the turnover of the business. They came up with the idea that, instead of both Mr Cosias and Ms Whynn covering all of the London boroughs, they should split the boroughs into roughly equal parts and each of them would work on his or her own boroughs. The idea of this was that each of them could have a more focused approach and it was hoped that more sales would result. I accept that the proposal was not a final decision and it was introduced to Mr Cosias as a proposal.[15]It was evident to those who saw the defendant when he arrived at work that morning that he was not in a good mood. Ms Whynn asked him to join her in the boardroom. She says that when she explained what she proposed, he got up in the middle of the meeting and said “I’m not fucking having any of this, this is what they did at BBT [viz, his previous employers] and I am leaving”. He then stormed out of the room.[16]From there he went to where Mr Liddington was working and said to him in an aggressive manner “Thanks mate, for splitting up the boroughs”. Mr Liddington asked Mr Cosias, if he would come with him into the meeting room to discuss the situation. In the meeting room, Mr Cosias continued to be aggressive towards Mr Liddington, shouting and swearing and being very intimidating and threatened that he would do damage to the Company. At one stage he threw his mobile telephone on to the floor, breaking it. He raised his hands a number of times, and pointed his fingers and continued to swear. He became increasingly loud and upset. Mr Liddington asked him to sit down and discuss the situation but Mr Cosias continued to stand up and be very threatening. He said that splitting up the boroughs was not appropriate and that the company should sack him. He kept asking Mr Liddington to “go outside and sort this out”.[17]Mr Cosias then accused Mr Liddington of having made remarks to fellow workers that he was a “junkie”. So loud was his voice that Mr Michael Overgage (who was both First Global’s landlord and a director of another company) came out of an adjacent meeting room, in which he was trying to conduct a meeting, in order to seek to calm down the noise. Mr Cosias then started swearing at Mr Overgage, accusing him of saying that Mr Liddington had said that Mr Cosias was “a junkie”; Mr Overgage retreated. Mr Cosias then asked Mr Liddington whether he wanted “to go outside” to discuss the matter. Mr Liddington refused and asked Mr Cosias to leave the building which he eventually agreed to do.[18]As he left he came across Paul Miller in the foyer and said to him that he would “get him killed” and that “he had better watch himself’. When Mr Miller asked why Mr Cosias was behaving in this way Mr Cosias grabbed Mr Miller by the neck and pushed his head back and said “You have been telling everybody that I am a junkie”, which Mr Miller denied. The security officer told Mr Cosias to leave the building and to calm down. Eventually he did but on his way he warned one Justin Willis to “watch himself’ and shouted to Mr Miller from the bottom of the steps to “come outside”. Mr Miller was both puzzled by all of this and observed to be very distressed. Mr Cosias left only after Ms Whynn agreed to go outside and speak to him. While outside, Mr Cosias said how much he hated Mr Liddington, that it was his entire fault, that he was going to get back at him and make sure that he took the locums from him.[19]Later that day the company received an email from Mr Overgage stating inter alia that he considered Mr Cosias’s behaviour to be “completely unacceptable, particularly in a shared office and quite frankly personally offensive” and withdrew his entitlement to have access to the floor on which he worked.[20]Later that day Mr Cosias spoke to Ms Whynn at the telephone and was told that he was being suspended on full pay. Mr Liddington took advice from his solicitor and sent by courier a letter to Mr Cosias confirming the suspension. He was specifically requested not to attend the offices or to contact any member of the staff, or any of the locums or Clients. In breach of this firm request on the following day he telephoned Mr Miller and said to him:
“Here is what you are going to do. If I get sacked you hand in your notice. If you don’t then I will get you killed, so you had better work hard to keep me in my job.”
[21]After taking legal advice Mr Liddington and Ms Whynn decided to terminate Mr Cosias’s contract of employment for gross misconduct pursuant to a power to do so given in clause 10.1 of his contract of employment. Clause 2.6.2 of Appendix B provided that “Gross misconduct will result in immediate dismissal without notice or pay in lieu of notice” and specified that “gross misconduct includes ... violent dangerous or intimidatory conduct....”[22]The directors were concerned at the effect that a communication of the decision would have on Mr Cosias. Accordingly they arranged for a meeting with him to take place away from the office on 16 September 2004 at 10.30 am at the Terminus Cafe at Great Eastern Street. The idea of the meeting was they should explain to him face to face why the decision was being taken to dismiss him; the Terminus was chosen because it was a public place and they thought that trouble was less likely to occur there. However, they did arrange for a security man to accompany them in case they needed physical protection. This last fact was not openly disclosed in Mr Liddington’s witness statement; in which he had referred to this person as “a member of the public” (in a passage to which I will shortly refer). In his evidence, however, he did openly come out with the information and volunteered that on reflection he really ought to have said in his statement that the person was a security man employed for the purpose of this meeting by First Global. Overall, this does not detract from the credit I place in Mr Liddington’s evidence.[23]Mr Liddington and Ms Whynn met with Mr Cosias as arranged. She explained to him that his behaviour had been unacceptable, that he had completely overstepped the mark and that the landlord had said that he was not allowed back into the building. She handed to him the letter of dismissal. Mr Cosias took the letter and started waving his hands towards Mr Liddington, telling him that he was going to “get you back for this, Iam going to take every locum you have and make sure you lose your business”. The security man (described in Mr Liddington’s statement as a member of the public) intervened to try and calm Mr Cosias down but he told the man to “fuck off and sit down and to mind his own fucking business”. He left the coffee bar but came back in again swearing and shouting that they should watch their backs and that he was going to hound them. Mr Cosias then said to Mr Liddington “Come on then, if you want to sort this out let’s go outside” and that Ms Whynn could get her husband Jason if she wanted because he was not scared of him.[24]Mr Cosias went out and came back a second time, again he was swearing and this time he hit Mr Liddington in the face with the letter; he resisted their attempts to leave and required them to stay sitting while he read the letter. When he had done so he again hit him in the face with the letter and said “I am going to hound you for this; you are going to lose your business” and other things.[25]By this time a security officer attached to the Terminus café arrived and insisted that Mr Cosias leave and kept him outside while the manageress assisted Mr Liddington and Ms Whynn to leave by a rear door. On their return to the office they discovered that Mr Cosias had already made a telephone call without giving his name in an attempt to speak to Mr Miller.[26]Mr Cosias’s account is that each of the witnesses who gave evidence before me was saying things which were untrue. He says that on arrival at work he discovered that his work diary was missing; on switching on his computer he discovered all his contacts, emails and ‘to do list’ had been deleted. He confronted Ms Whynn who asked him to go with her to the meeting room where she told him that he was no longer allowed to deal with clients on the ‘preferred list’; and was splitting up the boroughs. This would be a massive change and his own entitlement to commission benefits would be greatly affected. So he immediately expressed his concerns and asked to leave the room to get a better map. As he passed near Mr Liddington he recalled saying something like “cheers Greg for dividing up the Boroughs” and Mr Liddington “lost his cool” and demanded in a raised voice that Mr Cosias get back to the meeting. Mr Liddington went into the meeting room, shouted to Mr Cosias that he should sit down, intimidated him and told him that if he did not like the change he should leave. After 20 minutes in which there were raised voices on both sides he left. On the way out he was approached by Mike Overgage and regrettably snapped at him. He then bumped into Paul Miller and Justin Wills. Paul Miller “confronted me saying ‘What was I doing’ – Iwas angry and felt Paul was trying to interfere. I told him to mind his own business and ‘get out of my way’”. At the Terminus café on September 2004 it was Mr Liddington who was abrupt and condescending. Mr Cosias says that he did nothing wrong. His case is that the change in the Boroughs was designed to put a cap on his earnings and save the company money; and to punish him for “what had happened in Marbella in August 2004”. This account is markedly inconsistent with the evidence I heard from the claimants’ witnesses. As I have indicated, I reject Mr Cosias’s evidence.[27]The comment about Marbella refers to an incident which according to Mr Cosias took place during a visit there made by a number of employees of the company for a brief holiday and ‘Team Building Exercise’. The allegation is that while there Ms Whynn had tried to kiss him; he had politely declined her in a friendly way (as she was married with children) and she was not happy with the reaction and later said “Don’t think that you have one over me” – which he took to be a warning not to make a formal complaint against her. This allegation was denied by Ms Whynn, whose evidence was supported by a number of her colleagues. I accept their evidence and reject that given by Mr Cosias. I conclude that this supposed incident is a figment of his imagination and that there is not a shred of truth in it.[28]With the benefit of legal advice on 16 September 2004 the claimants made an application without notice to this court for an interim injunction which was granted. Part of the order was made for the personal protection of the second to sixth applicants under the Protection from Harassment Act 1987. A further part of the order was made in relation to the post termination covenants in the employment contract. Iwill deal first with the anti harassment part of the order; the other part I will deal with later in this judgment.

The order under the Protection from Harassment Act

[29]By section 1 of the Protection from Harassment Act 1997 a person must not pursue a course of conduct which amounts to harassment of another and which he knows or ought to know amounts to harassment of the other. A “course of conduct” must involve conduct on at least two occasions. “Conduct” includes speech. An actual or apprehended breach of section 1 may be the subject of a claim in civil proceedings by the person who is or maybe the victim of the course of conduct in question (see section 3). In such proceedings the High Court may grant an injunction for the purpose of restraining any course of conduct which amounts to harassment. That means that an injunction maybe made if the court is satisfied that the conduct in question is likely unless restrained to occur.[30]In respect of that part of the order which was made pursuant to the Act, Mr Cosias was restrained from:a. entering any part of the business premises of the claimant company or within 30 metres thereof;b. knowingly going within 30 metres of any of the individual applicants;c. telephoning any of the second to sixth applicants either at work or on their home, mobile or other personal telephone numbers, or e-mailing any of them at any of their personal or business e-mail addresses;d. in any other respect pursuing any conduct which amounts to harassment of any of the second to sixth applicants.[31]The contention of the defendant was that he did not behave in the manner alleged and so was not guilty of harassment. it is not in dispute that if he did so behave, his behaviour constituted a relevant course of conduct which amounted to harassment and the interim injunction was correctly made. In the light of my findings, the question at issue today is whether the injunction should be continued and, if it should be continued in favour of some claimants, whether it should be continued in favour of all the claimants. There is also a question whether any restraint should be limited in time or without limit of time.[32]Mr Cosias extracted in cross-examination the fact that since the matters in dispute occurred, he has not contacted any of the claimants let alone harassed them. He relies on this fact in support of his contention that there is no need for the continuation of the restriction in the order. I am however more inclined to think that this result was most likely to have been secured specifically because there was an order in place, containing a power of arrest, which he felt constrained to obey.[33]In my judgment, there are a number of features about the behaviour of Mr Cosias in this case which justify the continuation of the order and the continuing protection of each of those claimants presently covered by it. One is the irrationality of his behaviour, the evidence of fluctuating mood and of sudden, unpredictable and barely controlled rages. Another is his tendency to respond to what he perceives as unwelcome action on some other person’s part with recriminations against those who made, furthered them or are associated with them. There are a number of instances of actual or threatened recriminations in the papers in this case. These include his act of retaliation by reporting for sexual harassment Amanda Beazley and Nabeela Adam, after he had received a written warning on 7 April 2004 as a result of Amanda Beazley’s report of his behaviour to Ms Whynn; the threats to get back at Mr Liddington and take away the company’s locums and to kill Mr Miller; the false report to the NSPCC, following his dismissal, that the company had sent them locums without taking up their references or checking them for criminal records; and the Marbella allegations against Ms Whynn, advanced for the first time in a statement in these proceedings.[34]Although in my judgment it is clear that Mr Liddington, Ms Whynn and Mr Miller are the persons mainly at risk from this sort of behaviour, it seems to me that if an order were made covering them alone, then this would be likely to transfer to Debbie Draper and Karen Moncur the risk that Mr Cosias would retaliate against the company through them.[35]I now turn to consider the length of time that the order should continue in force. In my judgment, it ought to be in only the exceptional cases that an order is made without limit of time. The reason for this is that any restraining order constitutes a restriction to the liberty of the individual and if he breaches the order at some indeterminate time in the future he exposes himself to the risk of imprisonment. In my judgment, the courts should in cases such as these impose the least restraint possible. It cannot be in the public interest that there should be in existence more than a very few orders containing a power of arrest, without limit of time.[36]In this case there are three reasons why Iam of the view that in this case an order without limit of time is not appropriate and a short fixed-term is appropriate. The first is the fact that although Mr Cosias does lack control of his temper and has intimidated those with whom he has worked closely, he has not ever inflicted violence on any occasion and, even though he has expressed the threat, there does not appear to me to be a real risk that he might put it into action. Secondly, although he has shown a tendency to retaliate in the heat of the moment, the retraction of the complaint against Amanda Beazley and Nabeela Adam shows that he can return to control by himself when the heat of the moment has subsided. His retaliation is impulsive and not, it seems to me, the product of long-term grudge. Thirdly, it should be remembered that the claimants were once people who shared his life and were colleagues working together, at times in harmony and in some cases in friendship for at least a part of the time.[37]In these circumstances, it seems to me that the term of the order ought to be of sufficient length to cover any increase in tension which might result from the handing down of this judgment and its consequences. In my judgment, the appropriate term for the continuation of the orders under the PHA 1997 is one of 24 months from the date of this judgment. I am confident that this will be sufficient to secure the protection of the second to sixth claimants from harassment which is otherwise likely to occur.

The contractual restraints

[38]In this part of my judgment Iconsider the terms of the contractual restraints imposed upon Mr Cosias by the interim order. The restrains imposed by that order followed the wording (which I set out in paragraph 39 below) of the relevant clauses in his contract of employment. The claimant seeks to continue that part of the interim order which restrains the defendant from disclosing confidential information (see clause 13 below). The other restraints, which followed the wording of clauses 14.1, 14.2 and 14.3 below, were for a period of only six months, which has now elapsed. Mr Cosias argues for a ruling that all of the restrictive covenants were wider than was reasonable and should have been struck down; therefore the order should not have been made and he is entitled to enforce the cross-undertaking as to damages against First Global.

The contract of employment

[39]The restraints are to be found in the defendant’s employment contract and are, so far as relevant, in the following terms: 13.1 Trade Secrets and Confidential Information 13.1.1 The Consultant shall not make use of divulge or communicate to any person ... any of the trade secrets or other confidential information relating to FGL ... which he may have received or obtained while in the service of FGL … For the purposes of this Agreement trade secrets and confidential information shall include, but shall not be limited to(a) the names, addressed and contact numbers of Candidates and Prospective Candidates(b) the names, addresses and contact numbers of Locums and Prospective Locums(c) the personal information ... divulged to FGL ... by Candidates, Prospective Candidates, Locums and Prospective Locums recorded in FGL’s database(d) details of negotiations being carried out by FGL(e) the names of FGL’s ... contacts with Clients 14 OTHER RESTRICTIONS14.1 The Consultant shall not so as to compete with FGL ... during the period of six months after the Termination Date directly or indirectly (a) canvass or solicit or attempt to canvass or solicit business from any Locum (i) with whom the Consultant shall have had material dealings in the course of his duties at any time in the Relevant Period [defined to mean the 12-month period ending with the termination of his employment with FGL] or (ii) with whom and to the knowledge of the Consultant any employee of FGL ... shall have had material dealings in the course of their duties to FGL ... during the Relevant Period. Restrictions in identical terms in subclause (b) proscribed “canvassing or soliciting” business from Prospective Locums; in (c) dealing with or attempting to deal with or accepting instructions from any Locum or (d) Prospective Locum.14.2 The Consultant shall not during the period of six months after Termination Date directly or indirectly induce or seek to induce any employee of FGL ... who was such an employee at the Termination Date and with whom during the Relevant Period the Consultant had had material dealings ... to leave the employment of FGL14.3 The Consultant shall not during the period of six months after the Termination Date directly or indirectly solicit or interfere with the relationship between FGL ... and any Client.

The defendant’s case

[40]He contends, first of all, that First Global terminated his employment unlawfully and in breach of the terms of his employment contract, by summarily dismissing him when he was entitled to four weeks’ notice; therefore that it repudiated the contract; that the contract came to an end and the covenants fell with it – with the result that he is discharged from the obligations under the restrictive covenants. The dismissal was a breach of contract not merely because (on his account) there were no grounds for dismissal but also because he was entitled under the contract to a disciplinary hearing.[41]I reject Mr Cosias’s argument that there were no grounds for summary dismissal. My rejection of his evidence and .finding that the allegations against him were true means that he was guilty of behaviour which First Global were entitled to find amounted to gross misconduct justifying immediate dismissal.[42]Ireject also Mr Cosias’s contention that First Global were in breach because they did not follow the appropriate disciplinary procedure. It is clear from clause 2.1 of Appendix B to the contract of employment that “the procedure only applies to employees who have successfully completed 12 months continuous employment” and Mr Cosias had not done so. I reject the suggestion that First Global were in some way estopped from relying on that clause as unduly fanciful.[43]His second contention is that clauses 13 and 14 were unenforceable because they were either too vague or too wide and designed solely to prevent him competing with First Global. He submits that, given the nature of the recruitment agency market, particularly in the health and social care sectors, the information set out in clause 13(a), (b), (c) and (d) above was not unique or exclusive to First Global and therefore could not be described as confidential or its property. This was because persons who wanted employment as candidates or locums would usually register with two or three agencies so as to increase their chances of securing employment: that it stood to reason that each agency would require the candidate/locum to provide personal details and information; a consequence of restricting Mr Cosias from making use of such details would have the effect that he would be unable to work with such a candidate or any other agency for to do so would put him in breach of clause 13. Furthermore, details of candidates/locums could readily be obtained by visiting “job boards” on internet sites such as “Total Jobs” and “Gum Tree”, which are visited by recruitment agencies such as First Global. Similarly, it is said that the names of contacts of clients are readily obtainable from local authority or health authority yearbooks, which contain the names of heads of departments and the telephone numbers for social services departments; neither the names of clients nor the names of contacts are unique or exclusive to the first claimant. Finally, it is argued that the information that Mr Cosias may have acquired about candidates/locums or clients is properly to he regarded as falling within the definition of skill and experience and general knowledge acquired during his employment in respect of which protection cannot legitimately be claimed by an employer even though such information may equip the employee as a competitor or potential employee of a competitor of First Global.

The law

[44]In relation to trade secrets, properly so called: an employer is entitled to obtain a court order preventing the disclosure of trade secrets, whether he has secured this protection by a post-termination covenant or not.[45]In relation to confidential information, which does not amount to a trade secret: the general rule is that an employer can restrain an ex-employee from using or divulging confidential information after the termination of his employment by express covenants: see Brearley & Block on Employee Covenants and Confidential Information – paras 5.37 to 5.45.The general principle with regard to such clauses is that they must only protect an interest or advantage meriting protection and should go no further than is reasonably required in the protection of that interest.[46]In relation to anti-competition clauses: there is a general rule that all covenants in restraint of trade, such as the anti-competition clauses in Mr Cosias’s contract of employment are prima facie unenforceable at common law and are enforceable only if they are demonstrated to be reasonable by reference to the interests of the parties concerned and of the public. The burden of establishing that a covenant is no more than is reasonable in the interests of the parties is on the person who seeks to justify it; if he does do so, the onus of proving that it is contrary to the public interest rests on the party attacking it.[47]In the instant case we are not concerned with trade secrets, properly so-called. We are concerned only with confidential information and the issue for me to determine is whether the items which are stated to be confidential within the terms of clause 13 are indeed confidential and whether First Global are able to satisfy me that they have a legitimate interest which entitles them to protection in the terms of the clause.[48]Before proceeding further it is important that I should indicate in rather more detail what I find to be the nature of the company and its business, and the information alleged to be confidential and examine whether the company has an interest which is in the parties’ and the public interest to protect.

First Global’s business

[49]First Global is a niche recruitment consultancy focusing on the health and social care sectors. It specialises in recruiting qualified social workers and unqualified social workers, occupational therapists and physiotherapists for temporary or permanent positions. Although in a niche area, it is an area which it shares with about 60 or so other small companies.[50]Permanent employees who are placed with clients are known as candidates. The company receives a one off payment when a candidate is successfully placed with his or her new employer and, once placed, they become employed full time by the client and First Global does not have a continuing interest in them, It keeps in touch hut at a distance for fear that the client may think that First Global is trying to get them back onthe books. This case is not concerned with candidates.[51]The temporary workers are known as contractors or locums. The company places locums with public sector clients such as social services and national health trusts as well as some private organisations providing services to those public sector bodies. It receives payment from the client organisation with whom the locum is placed for each day or week worked by the locum.[52]The company has a total of about 1,200 names in its database of locums and prospective locums. However, this includes unqualified as well as qualified personnel. Of the 1,200, there are only about 50 (at the time of the original application) and some 35 (at the date of the hearing) which were qualified personnel and were on its contract book. At the time of the original application Mr Liddington stated that the turnover from this aspect of the business amounted to some £40,000 per annum. In respect of these persons, I accept that the database contains confidential information regarding each locum and prospective locum, such as contact details, mobile and home telephone numbers as well as date of birth and further personal, health and professional information which the locum is required to supply on a full curriculum vitae and health questionnaire. In relation to each one of these the company will have had to obtain proof of identification (in the form of a photocopy of their passport, driving licence and utility bill); references from referees and previous employers; and they will have been required to carry out a check as to the existence of any relevant criminal convictions, known as a CRB check.[53]There is a shortage of qualified social workers in the current market. The client side does not need a great deal of attention, the majority of the effort being spent on keeping the locums happy. This is done by forming a close relationship with the locum (by telephone or in person) and by being in constant touch. The goodwill which is there generated between the consultant (on behalf of the company and the locum is said to be a crucial asset of the company.[54]The argument advanced on behalf of Mr Cosias, that the information on locums and prospective locums is not confidential, because it can be found on the named websites and is therefore within the public domain, was tested closely during both cross and re-examination. In my judgment the point was not well made. The information in the websites was usually found to involve persons who are not qualified social workers and generally consists only of names and a means of contacting the person, but only to the extent that the person may respond to an enquiry made of him if he wishes to do so. The information available or obtainable in this way would clearly fall a very long way short of that which would be contained in First Global’s files and would in any event be needed to enable a locum or prospective locum to be presented to an employer. Nor do I accept that such persons are likely to have provided like information to other recruitment companies. I accept the evidence of Mr Liddington that the provision of such information by persons is time consuming and tiresome for them. It is his experience that it is quite rare for someone to have provided information in that detail to more than one recruitment agency. When provided its dissemination is limited by the protections afforded by the Data Protection Act.[55]In my judgment, the information in First Global’s files would have been obtained by them only with the expenditure of significant effort on the part of its employees and cost on its part. It is unlikely that a significant part of the information would be in the files of any other recruitment company or in the public domain. The exercise in collecting that information is indeed something which will enhance the skill and experience gained by Mr Cosias and become part of him. However, the exercise in amassing that information and ‘keeping warm’ the contacts with candidates and clients must be distinguished from the body of the information itself and the goodwill established for the benefit of the company by that exercise.[56]In my judgment, First Global has a legitimate interest in protecting that body of information and ensuring that no former employee takes it with him or passes it on to any other person. Both the confidential information in relation to locums, prospective locums, candidates and prospective candidates and the goodwill generated by the sort of contact which First Global maintains with them is indeed “an asset inherent in the business2 which can properly be regarded as, in a general sense [the company’s] property and which it would be unjust to allow the employee to appropriate for his own purposes.[57]It is argued that clause 13.1.1 is too wide because some parts of the information, such as individual names, addresses and contact details, might be in the public domain and the clause extends its prohibition to cover even those. As I have indicated, I do not accept that the enquiry during the evidence in this case supported the suggestion that there was a serious possibility of this occurring. However, in my judgment the argument advanced is not correct. The covenant does not prevent Mr Cosias making use of or divulging pieces of information which are in the public domain and come to him independently of his employment, even if there is a co-incidence between that and the information which is confidential as between him and First Global.[58]It is suggested that the protection in relation to contacts with clients is different and that it is not confidential because that also is available to the public from handbooks published annually in relation to local and health authorities. Careful examination into this proposition was also made during the course of the evidence. Although it was found that the handbooks and registers, chosen by Mr Cosias to make the point, do indeed provide the names of the public authorities, and of their chief executive officers and, sometimes, other departmental heads, they do not contain the contact details of the person in the relevant department who would be concerned with the recruitment of employees of the appropriate grade in question. In my judgment the case for this being an appropriate subject for protection has been made out.[59]As regards the restrictions in clause 14.1: I have already pointed out that I accept that the goodwill which First Global established with locums was an asset of the business which it was entitled to protect. The covenant which was in any event limited for a period of only six months’ duration and extended only to those persons with whom Mr Cosias or a colleague had knowingly had contact in the previous 12 months was, in my judgment, not unreasonable in extent. In the light of the extensive evidence, which I accept, that Mr Cosias had issued threats to damage Mr Liddington and the company be taking this class of person away from the business, there was a sound foundation for making the order.[60]As regards the restriction in relation to clause 14.2: it is not in doubt that the maintenance of a stable workforce is a legitimate interest for protection by means of a restrictive covenant: see Dawnay, Day & Co Ltd v De Braconier D’Alphen[1997] IRLR 285. In retrospect, it is now clear that Mr Cosias engendered such hostility amongst his fellow employees that there was no likelihood that any one of them would be induced to follow him elsewhere. I am not sure that this was apparent at the time. However, even if it should have been, and even if the order were not properly made in this one respect, Mr Cosias has clearly not suffered any loss thereby.[61]As regards the restriction in relation to clause 14.3: there are two parts to be considered. One is the obligation “not to solicit”, the other is the obligation “not to interfere with the relationship with any Client”. There is a linguistic problem in relation to this otherwise carefully drafted contract. For convenience I will set out the clause a second time. It reads:
“The Consultant shall not during the period of six months after the Termination Date directly or indirectly solicit or interfere with the relationship between FGL ... and any Client.”
The question is whether the clause should be read as though the words were imposing an obligation “not to solicit any client or otherwise interfere with the relationship between FGL and any Client” or “not to solicit, or otherwise interfere with, the relationship between FGL and any Client”. I find it difficult to accept the notion, in the latter alternative, of soliciting a former employer’s relationship with a client. In my judgment, it is most likely that the parties intended the former obligation but unfortunately made a syntactical error in expressing their intention.[62]As regards the obligation not to interfere with the relationship between FGL and any client, it is not in doubt that First Global had spent considerable time and effort in establishing its relationship with its customers; they had a proprietary interest in that connection and had a legitimate interest in seeking its protection by way of a restrictive covenant. There was compelling evidence that Mr Cosias was intent on disrupting it. The evidence of the malicious call which he made to the NSPCC gave compelling grounds for believing that he was intent on damaging that connection, just as he had threatened to Mr Liddington and Ms Whynn that he would. The issue of an interim injunction was absolutely appropriate.[63]As regards the obligation “not to solicit any Client”: this is indeed a very wide restriction. This is because “Client” is defined in the contract sufficiently widely to include any local or health authority itself, which had dealt with First Global during his employment for the purposes of obtaining permanent or contract staffing, even though First Global’s business would be only with the contact in the departments involved in social care. The result is, says Mr Cosias, that if he wanted to provide (for example) a temporary accountant to the authority’s treasury department the covenant (and also the restriction based on it in the Order) would prevent his doing so. The point is well made. In my judgment, the clause is indeed wider than is reasonable and it follows that the restriction in the order is also too wide in this respect and a blue line should be struck through the words “solicit or otherwise”. I say “in this respect” to reflect the fact that, had the clause and indeed the order (which defined “Client” in the same wide terms as in the contract) been drafted more narrowly so as to confine it to those departments of clients with whom First Global were in contract, it could have been justified.[64]In paragraph 8 of his supplementary affidavit dated 25 October 2004 Mr Cosias made the point that “client details are easily obtainable by purchasing Social Services year book. This is a point about confidential information not “soliciting”. I have dealt with and rejected this argument in paragraph 58 above. In a statement dated 26 October 2004 Mr Liddington responded to paragraph 8 saying “The Claimants are not seeking relief in relation to clients”, However, the following day an Order was made, to which was attached a penal notice, in which Mr Cosias gave an undertaking not “directly or indirectly [to] solicit or interfere with the relationship between FGL and any Client”. The fact that the order was given by undertaking does not, it seems to me, make a material difference in principle to the question whether the point can be taken by Mr Cosias at this hearing and whether the undertaking in damages can be enforced.[65]In these circumstances, it seems to me that, apart from the matter in paragraph 63 above, Mr Cosias’s assault on the second part of the interim order is unjustified and his application for an Order that he is entitled to damages would fail. In the light of my findings in paragraph 63, however, it seems to me that, in the absence of agreement between the parties as to the consequences of the finding, I should hear submissions as to whether Mr Cosias’s application for a remission of this matter for an assessment of damages should succeed.

Cited in 1 later judgment