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View the article online at http://citywire.co.uk/wealth-manager/article/a750122

Brewin v Charles Stanley: A leading employment lawyer's verdict

by Elaine Aarons on May 09, 2014 at 10:27

Teams are often immediately on the back foot in cases involving injunction applications – but facing a claim for damages means the individuals in this case look in a significantly stronger position, for reasons explained below.

Conspiracy and Unlawful Conduct

Brewin claims that six former employees acted as ‘recruiting sergeants’ and actively recruited 12 additional employees to leave, and that Charles Stanley induced breaches of their employment contracts. But their case is based on inference alone – Brewin concludes that the fact they left together means they breached their duties. The defence asserts that in fact, good practice was followed: the positions were advertised in a local newspaper and the services of a head hunter were engaged.

Brewin has significant evidential difficulties proving otherwise. It simply has no hard evidence of solicitation or conspiracy on the part of the team of six. Brewin claims the advertisement was used to cover up Charles Stanley’s unlawful conduct but Charles Stanley vehemently denies this.

Given the lack of concrete evidence, at the moment it seems that Brewin is disproportionately reliant on successfully cross-examining the individuals.

Its only other hope is that documents that support its case will be disclosed in the course of the litigation. Given the cost of litigation and the risk of having to pay the other side’s costs if it loses, proceeding without more substantive evidence is a very high risk strategy.

Brewin also claims the team breached fiduciary duties which, if correct, would be serious. But none were directors and it is not clear on what basis they can be said to be senior enough to have fiduciary duties attached to them.

Breach of Contract

Brewin also claims the six employees should have informed it about any approach made to staff by a competitor on the basis of an express clause in the employment contract purportedly requiring this.

Previous case law has endorsed such clauses but the defence argues convincingly that:

(i) the clause does not require disclosure if the employee was only considering such employment and before an offer of employment is made. Also, 10 days prior to the six resigning, one of them informed Brewin that some staff were considering job offers from a competitor; and

(ii) the clause concerned is an unenforceable restraint of trade. Indeed, the defence states that when Brewin was told, it said it was not surprised and it was clear it knew that the individuals had cause to be unsettled.

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1 comment so far. Why not have your say?

Philip Milton

May 09, 2014 at 11:23

Most curious to see a legal professional prepared to add opinion and comment whilst a case may be ongoing - very dangerous indeed from what i understood? Then, I am not a lawyer!

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