EMPLOYMENT LAW UPDATE: THE DYSON ELECTRIC CAR CASE
LUKE HUTCHINGS >
Employment Law PartnerMon 16 April 2018
A recent interesting case sheds some light on how the Courts might interpret clauses in contracts of employment requiring employees to tell their employer if and when they are approached for employment by a competitor business.
Pierre Pellerey worked for the Dyson group as a motor drives engineer, mainly working on the iconic Dyson vacuum cleaner, but he also had a background in the automobile industry. In November 2014, a recruitment agent contacted Mr Pellerey and indicated that Tesla, the leading US electric car manufacturer, might be interested in employing him. Discussions went well and Tesla made Mr Pellerey a job offer, which he accepted. The job would be based in the US, so Tesla set about obtaining a visa for Mr Pellerey, who remained working for Dyson in the meantime.
In May 2015, Mr Pellerey learned that the Dyson group was to develop an electric car and that he would be assigned to the project (which was known as “Project E” within Dyson because of its highly confidential nature). Mr Pellerey’s contract contained a clause that required him to notify Dyson if he was approached or offered a job by a business in competition with Dyson. Mr Pellerey did not inform Dyson about his job offer from Tesla.
In June 2015, Mr Pellerey received an offer from a Tesla business based in Europe (presumably the US visa issues were insuperable) and he handed his notice in. Dyson commenced legal proceedings against Mr Pellerey. The “notification clause” was one of the matters considered by Snowden J at trial.
Firstly, the Judge decided that the obligation to notify Dyson arose when Mr Pellerey was informed of “Project E” as then it was obvious that Tesla was a competitor of Dyson.
Furthermore, an injunction should be granted to prevent Mr Pellerey going to work for Tesla for twelve months because had the employee reported the approach to Dyson in November 2014 (as he should have done), then he would never have been assigned to “Project E” and thereby learn so much about Dyson’s confidential plans to enter the electric car market.
Luke Hutchings, Partner at Taylor Rose TTKW, and an experienced adviser on restrictive covenants commented “this is an important case which clarifies the law around clauses which purport to oblige employees to inform their employer of approaches from competitor businesses."
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