Commercial Law – Employment Law – interpretation of the terms of the contract


case Helmet Integrated Systems Ltd v Tunnard and others [2006], was involved in a dispute about what action would be allowed under the terms of the employment contract. Claimants (“HISL”) to manufacture and sell protective equipment. In 1993, it hired a new helmet design which successfully marketed especially to the London Fire Brigade. The defendant was a senior salesman with creditors.

Although the claimant’s employment, the defendant had an idea for a new modular helmet. He believed that his employers were not interested in developing a new helmet, especially in the European market, as he perceived it to be a space for such a product to gain a foothold.

Between September 2001 and February 28, 2002 the defendant took a few steps to go to his idea. He obtained funding and ask for products designers to prepare the first drawings of his idea. He handed in his resignation announcement on 1 February 2002, and served until the end of the notice period of his until he left on 28 February.

Defendant incorporated Modular Helmet Systems Ltd (“MHSL”) two months after his departure from creditors. Shortly thereafter, a rival company to HISL, Lion Apparel Inc. (“Lion”) invested the majority of MHSL. The claimant brought claims alleging that the defendant had acted in breach of his obligations guaranteed in developing safety helmet that would be in competition with safety helmet HISL, and had worked in violation of fiduciary obligations in failing to report its activities while still in contract HISL is employment.

those claims were rejected by the judge in the patents county court. He is determined to say about preparing for departure were not protected and that there was no breach of duty of good faith or guaranteed by the employee. He held that the employee was authorized to decide to start a business in competition with his employer and preliminary steps to do so were allowed. He also completed there was no breach of fiduciary duty because such a duty had to be confined to his duty as a sales person.

Claimant appealed this decision. On appeal the claimant relied on the fact that the defendant print contract of employment provided that it was his duty to advise their employer on the activities of competitors and their pricing. They argued that he would be required to report such activities, whether they were attacked by rivals or himself as part of his plan to compete with his former employer.

The appeal was dismissed. It was held

– situations, although the activities of the defendant would have amounted to competitors if attacked by competitors (and he therefore had owed a fiduciary duty not to misuse information about such activities for their benefit or for the benefit of someone other than the applicant) , it did not mean that he was under any obligation to inform HISL his own operation

-. Word job text does not limit the freedom of an accused person to prepare for the race to go. He was hired as a salesman not a designer and it was never in consideration of either party that he would develop a helmet. Clear words had to limit the freedom of ordinary workers was to retire and set up in competition with his former employer, the job specification defendant did not make

-. He was not in any relevant fiduciary duty to creditors. The defendant owed no fiduciary duties in connection with the development of a preliminary concept for a new helmet. Because he was not in breach of such obligation by seeking to raise funds for such a project but still work. The defendant was working on his idea at the time and consequently developed a concept he had.

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© RT COOPERS, 2007. This Briefing Note does not provide a comprehensive or complete statement of the law on the issues discussed nor does it include legal advice. It is intended to highlight general issues. Always sought expert legal advice in relation to certain conditions.


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