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Are post-termination restrictions on a recruitment consultant enforceable where information is widely available on social media?
- AuthorClare Gilroy-Scott
The High Court has recently held that 6 month non-dealing and non-solicitation post-termination restrictions were enforceable by the recruitment business against a former employee as the recruitment business had a legitimate business interest to protect, even though much of the information was in the public domain (East England Schools CIC (trading as 4myschools) v Palmer and another  EWHC 4138 (QB)).
The employer was an educational recruitment business and Palmer was one of their consultants who dealt with teacher applicants. She left to join Sugarman Education as a senior consultant and 4myschools had reason to believe she was acting in breach of her restrictive covenants. They made an application to the High Court for damages arguing that they had a proprietary interest to protect, i.e. their trade connections with client schools and candidate teachers, and that Ms Palmer had built up close relationships with them which she could now take advantage of for her own benefit and that of her new employer.
The defence’s argument was that schools and teachers did not generally have loyalty to a particular agency, going wherever matched their immediate need, often registering with more than one. They also argued that the rise of the internet and social media meant that all the relevant information was in the public domain now and therefore could not be confidential to any agency.
The court accepted that the market is candidate-driven and that a lot of the relevant information about schools and teachers is now available to the public. However, the court felt that, although schools might use multiple agencies, there was a choice and to be the first choice is a valuable asset for the agency, and often this came down to the relationship between the consultant and the school. It was relevant that Mrs Palmer was, primarily, the person who visited the schools and who spoke to them over the telephone on behalf of 4myschools. The building up of relationships with schools and teachers was an integral part of the role envisaged for her and it followed that it was reasonable for 4myschools to envisage that Ms Palmer would at the end of her employment with 4myschools, be in a position to use the relationships which she had built up and the confidential information which she had acquired during that employment to solicit the business of a number of schools away from 4myschools to her new employer.
This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 020 7404 0606 and ask for your usual Goodman Derrick contact.