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25 Jan 2016
Employment law firm
The truth of Helmet Integrated Systems Ltd v Tunnard and Others [2006], involved a dispute over what actions could possibly be allowed beneath the regards to a jobs contract. The claimant ("HISL") produced and sold protective gear. In 1993, it commissioned a fresh helmet design that was successfully marketed especially to the London Fire Brigade. The defendant was obviously a senior salesman with all the claimant.

Employment law firm

During the claimant's employment, the defendant had the thought for a new modular helmet. He believed that his employers are not thinking about developing a new helmet, particularly around the European market, where he perceived there to become a gap for this type of product to get a foothold.

Between September 2001 as well as the 28th of February 2002, the defendant took a number of steps to safely move his idea. He obtained some funding and arranged for manufacturers to get ready initial drawings of his concept. He handed in the notice of resignation about the 1st of February 2002 and worked 'till the end of his notice period until he left on the 28th of February.

The defendant incorporated Modular Helmet Systems Ltd ("MHSL") two months after his departure from your claimant. Shortly thereafter, a rival company to HISL, Lion Apparel Inc ("Lion") invested in a majority shareholding in MHSL. The claimant brought claims alleging how the defendant had acted in breach of his duty of fidelity in developing a safety helmet which will maintain competition with HISL's safety helmet, together acted in breach of his fiduciary duties in neglecting to report his activities while still under HISL's contract of employment.

Those claims were rejected from the judge in the patents county court. He figured that acts of preparation before departure are not actionable and that there was no breach of duty of fine faith or fidelity by the worker. He held the employee was allowed to decide to set up a business in competition with his employer which the preliminary steps taken to do so were permitted. Younger crowd figured there wasn't any breach associated with a fiduciary duty because this kind of obligation needed to be confined to his duty being a salesman.

The claimant appealed using this decision. On appeal the claimant relied on the fact that the defendant's printed contract of employment so long as it was his duty to advise his employer around the activities of competitors and their pricing structures. They argued that he was, therefore, within duty to report such activities whether they were undertaken by way of a competitor or on his own within his intend to take on his former employer.

The appeal was dismissed. It was held:

- Underneath the circumstances, even though defendant's activities might have amounted to competitor activity if undertaken by a competitor (and he therefore would have owed a fiduciary obligation not to misuse information about such activity for his or her own benefit or the advantage of someone besides the claimant), it did not signify he was under any obligation to tell HISL of his or her own activities.

- The language of the job specification failed to restrict the defendant's freedom to get ready for competition on leaving. He was employed like a salesman not a designer and it never was in contemplation of either party that he would produce a helmet. Clear words were required to restrict the standard freedom of an employee who had been quitting his employment and setting up competing to his former employer, that your defendant's job specification didn't do.

- He was under no relevant fiduciary duty for the claimant. The defendant owed no fiduciary obligations with regards to the introduction of an initial concept to get a new helmet. Therefore he had not been in breach of the such obligation by wanting to raise funds for this type of project while still in employment. The defendant ran his idea in his own time and because of this the theory developed belonged to him.


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