Two resellers clash in High Court battle

Ex-salesman left to start up rival

Two resellers are locked in a High Court battle regarding the activity of an ex-employee who left one reseller to start a rival.

On Monday, judge Anne Molyneux began hearing the case between Basingstoke reseller Decorus Limited, and ex-employee Daniel Penfold and his company Procure Store, which is also based in the Berkshire town.

Decorus alleges Penfold breached his contractual duty of fidelity; breached restrictive covenants; and misused confidential information.

Penfold started work at Decorus in sales on 2 April 2012 and gave in his notice on 7 January this year before leaving on 8 February. On 2 September 2015 - during his employment at Decorus - he is alleged to have had a hand in setting up the company Procure Store.

The closing submissions notes of Decorus' counsel Chris Quinn claim that Penfold "undoubtedly breached his duty of his fidelity" by accessing purchasing logs during the last two months of his employment at the reseller.

"Mr Penfold engaged in repeated access of Decorus' historic purchasing logs," the document states.

"At the hearing before Mr Justice Openshaw [prior to the High Court proceedings], Mr Penfold told the court he had done this to ascertain how quickly he could get his new business up and running. Even were that a truthful explanation, such access was an undoubted breach of his duty of fidelity.

"The true reason was that Mr Penfold wanted to arm himself with the knowledge as to what hardware and software requirements were likely on the part of Decorus' customers in the coming months. He subsequently used this information as part of his unlawful solicitation."

The closing submissions of Penfold's counsel Spencer Keen said otherwise.

"The claimant's case relied upon the first defendant's [Penfold's] own candid admission that he did look at the purchasing logs relating to the period when he started employment with the claimant to look at how his profit developed. He did this to see how long it would take him to start work on his own. In doing so he was not using information that he was not entitled to because this was information that he had access to and was entitled to see for the purposes of checking his commission."

In 2013, a new contract was enforced at Decorus, after external consultation, in which one clause stated that the defendant must not act in competition to the company; be employed by a main competitor; or be "in the business of researching info, developing, manufacturing, distributing, selling, supplying or otherwise dealing with restricted services".

In Penfold's counsel Quinn's closing submissions, he said the clause was "plainly drafted to cover as many industries" and so was not specific enough to enforce.

A judgement will be given next month.