Covid testing company granted injunction against employee

Mark Aspin Head of Dispute Resolution reports on this recent case.

A company that provides Covid testing equipment has been granted an injunction to prevent a former employee from working for a rival business for a period specified in a restrictive covenant.

The case involved Source Bioscience UK Ltd, part of a group of companies that provide laboratory services to clients in the pharmaceutical industry, the NHS and private healthcare providers.

The defendant in the case, Mr Wheatcroft, began working for Source Bioscience in 2014, and shortly afterwards became its chief operating officer. His employment contract contained post-termination restrictions.

He resigned on 31 May 2021. In June, the company learnt that he was going to work for a rival business.

It said that it had raised concerns with Wheatcroft, but he denied that the rival was establishing a COVID-19 testing business. He also denied being employed by the rival, and there was an email to that effect.

However, Source noted that the email was carefully crafted to only refer to “employment” and did not mention that Wheatcroft was also involved in consultancy work. He had given some undertakings but refused to give assurances that he would not be involved with any business in competition with Source or provide the new company with goods or services.

Source applied for an injunction to prevent him from competing with them, from releasing confidential information, and from soliciting customers for the period covered by the covenants.

The court granted the application. It held that there was a serious issue to be decided at trial.

The judge said it was not the court’s task to make findings of fact at this stage, but there was a wealth of evidence to suggest that Wheatcroft had done more than just accept a job at the new company.

There was email evidence that he was sourcing employees for them. The evidence was that his relationship with the rival was a real and compelling threat to Source.

Source said that Wheatcroft had knowledge of internal discussions concerning the COVID-19 tests, and if that knowledge was lost to a competitor, then it would lose its competitive advantage. The harm caused by that would be hard to quantify and would be exacerbated by the pandemic.

If you would like more information about the issues raised in this article or any aspect of employment law and protecting your business please contact Mark on 01228 516666.