Commercial Law - Employment law - Interpretation of Terms of Employment Contract

The case of Helmet Integrated Systems Ltd v Tunnard and Others [2006], involved a dispute over what measures could be accepted under the terms of an employment contract. The plaintiff ( "Hist") manufactures and sells protective clothing. In 1993, he commissioned a new helmet design, which was particularly successful, the London Fire Brigade marketed. The defendant was a senior vendor on the plaintiff.

While in the employment of the plaintiff, the defendant had the idea for a newmodular helmet. He believed that his employers were not interested in developing a new helmet, especially in the European market, where he saw a gap for such a product to gain a foothold.

Between September 2001 and 28 February 2002, took the defendant a series of measures to advance his idea. He received a portion of the financing arranged for and create a product designer first sketches of its concept. He gave his resignation on 1 February 2002and worked until the end of his notice period, until he left at 28 February.

The defendant accepted Modular Helmet Systems Ltd ( "MHSL") two months after his retirement from the plaintiff. Shortly thereafter, a rival company invested hisler, Lion Apparel, Inc. ( "lion") in a majority stake in MHSL. Claims of the plaintiff argued that the defendant is in breach of his duty of loyalty in the developing countries bear a protective helmet that would act in competition with hislerHelmet and had a breach of their fiduciary duties in the absence of its activity still under contract hisler traded by the report to employment.

These were rejected by the judge in the patents court. He noted that the preparatory acts were not actionable before departure and that there is no breach of duty of good faith and loyalty by the employee. He ruled that the employee was entitled to the decision to set up a business in competition with his employer andthat the preliminary steps were allowed to do so. He also concluded that there was no breach of a fiduciary duty, because such an obligation had to be limited to his duty as a seller.

The applicant appealed against this decision. On the plaintiff to the fact that the defendant printed employment contract, unless advised his duty to his employer about the activities of competitors and their pricing structures appeal was argued. They argued that he thereforecommitted to such activities, whether undertaken by a competitor or of his own report, conducted as part of his plan to compete with his former employer.

The complaint was dismissed. It was noted:

- Have stood under the circumstances, even though the defendant's activities were competing activity, if carried out by a competitor (and he would therefore owed a fiduciary duty to not misuse information about this activity for his own benefit or for the benefit ofa person other than the applicant), did not do it, that he was obliged to inform hisler its own activities.

- The words are not limited to prepare the freedom of the requirement profile of the defendant for the competition when you leave. He was employed as a salesman, not as a designer and it was never in the contemplation of both parties that he was to develop a helmet. Clear words were necessary to the freedom of the ordinary, a worker who had quit his employment and limit settingto compete with his former employer, the defendants do not have the requirement profile.

- He was under no relevant fiduciary duty to the applicant. The defendant does not owe fiduciary obligations in relation to the development of a preliminary concept for a new helmet. Therefore, he did not raise against such a commitment by the attempt to allocate funds for such a project still in employment. The accused was working on his idea for his time and as a consequence of the conceptdeveloped, which belonged to him.

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© RT Coopers, 2007. This briefing note provides not constitute a comprehensive or complete statement of the law on the issues being debated and not legal advice. It will deal only with general issues. Specialist legal advice should alwayssought in relation to the particular circumstances.

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