EUPillar James Petter v EMC Europe Limited and EMC Corporation [2015] EWCA Civ 828

Summary

The claimant was employed by the English subsidiary of an American company, EMC. He was holding the post of Global Director which put him in a position to make a contribution to the success of the company. As a result, he was entitled to benefiting from a Stock Plan which awarded him certain common stock. His contract contained a restrictive covenant as well as a choice-of-court agreement. Mr Petter resigned from his post, giving notice on 15th January 2015. He intended to take up employment with a competitor of his employer. On 27th February 2013, EMC started proceeding in the courts of Massachusetts, invoking the exclusive jurisdiction clause. EMC sought a declaration to rescind the most recent award of stock granted to Mr Petter. On 13th March 2015, Mr Petter started proceedings in England, seeking a declaration that he did not act in breach of contract as well as declarations the restrictive covenant and the restrictive terms of the Stock Plan were unenforceable. Also, Mr Petter sought an antisuit injunction against EMC. EMC challenged the jurisdiction of the English court. The English High dismissed the jurisdictional challenge, assuming jurisdiction under Section V of the Brussels I recast. However, it refused to award the anti-suit injunctions. Mr Justice Cooke held: “50 In my judgment I am therefore bound by the reasoning in Samengo-Turner which applies equally to the facts of this case and certainly sufficiently so to give rise to a good arguable case on the part of Mr Petter. In consequence, Mr Petter is entitled to bring his claim against EMC Corporation in this country under Article 21.1(b)(i) and Article 21.2 and EMC is only entitled to bring proceedings in courts of this country against Mr Petter under Article 22 . By reason of the terms of Articles 23 and 25.4 the agreement between EMC Corporation and Mr Petter to the jurisdiction of the courts of Massachusetts is of no legal force, so far as the courts of this country are concerned. It has therefore to be ignored even though it is, as found already by the court in Massachusetts, as a matter of Massachusetts law, binding upon the parties to it. […]. […] 71 Applying the relevant considerations for the grant of an interim injunction, I come to the clear conclusion that it would not be appropriate to grant the anti-suit injunction sought. Furthermore, since the effect of it is likely to preclude any future decision by the Massachusetts court at all, so that it is, to all intents and purposes, final in its effect, a higher threshold may be necessary to grant such an injunction. If what was being sought was a final injunction, I would not consider the case made out.” [50 and 71] Both parties appealed. The Court of Appeal confirmed that the English court had jurisdiction. It was also awarded an anti-suit injunction which was intended to enforce the EU public policy, protecting weaker parties to contract. Lord Justice Sales stated: “55. In my view, section 5 of the Regulation reflects and seeks to give expression to a clear public policy to protect employees in relation to litigation relating to their employment, because they are taken to be in a weaker negotiating position by reason of their economic and social status as against employers. The decision in Samengo-Turner gives effect to this public policy, as reflected in the Regulation. In my opinion, it was legitimate for the court in Samengo-Turner to do this.” [55]