Standard Life Health Care Ltd v Gorman & Ors

Standard Life Health Care Ltd v Gorman & Ors

It is strongly arguable that, where agents have committed serious breaches of duty of loyalty and registered with a competitor, the principal is entitled to suspend them and is not obliged to provide work or remuneration during the notice period. The contractual right to suspend is broad enough to cover such circumstances. The balance of convenience favours granting an injunction to restrain the agents from working for competitors pending trial, especially where the agents have received compensation from the competitor.

Parties
Respondent/claimant: STANDARD LIFE HEALTH CARE LIMITED; Appellants/defendants: GORMAN & ORS
Jurisdiction
England and Wales
Judgment Date
11 May 2009
Procedural Posture
Civil Appeal / Interlocutory Appeal From High Court Decision on Injunction Pending Trial
Outcome
Appeal dismissed
Legal Topics
Injunctions, Suspension of Agents, Right to Work During Notice Period, Breach of Duty of Loyalty, Interdependent Contractual Obligations
Contract Law Employment Law Agency Law Injunctions Suspension of Agents Right to Work During Notice Period Breach of Duty of Loyalty Interdependent Contractual Obligations

Case Brief

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Parties

STANDARD LIFE HEALTH CARE LIMITED

Respondent/claimant

GORMAN & ORS

Appellants/defendants

Procedural Posture

Civil Appeal / Interlocutory Appeal From High Court Decision on Injunction Pending Trial

Legal Issues

  1. 1 Whether Standard Life was entitled to suspend agents during notice period and prevent them from working for competitors without providing work or remuneration
  2. 2 Whether an injunction restraining agents from working for competitors should be granted when agents are suspended and not provided work
  3. 3 Whether the obligation to provide work is interdependent with the agent's duty of loyalty

Ratio Decidendi

It is strongly arguable that, where agents have committed serious breaches of duty of loyalty and registered with a competitor, the principal is entitled to suspend them and is not obliged to provide work or remuneration during the notice period. The contractual right to suspend is broad enough to cover such circumstances. The balance of convenience favours granting an injunction to restrain the agents from working for competitors pending trial, especially where the agents have received compensation from the competitor.

Court Disposition

Appeal dismissed

Orders

  • Interlocutory injunction restraining the appellants from working for competitors to continue until trial
  • No requirement for Standard Life to provide work or additional remuneration during suspension