Consultant Towers Perrin has been granted an injunction by the Victorian Supreme Court in Melbourne, preventing former employees of its custody consulting team, from approaching a group of 27 clients they were previously working with.
The judge, Mr Justice Mandie, ruled that the team, which defected to rival consulting group, Melbourne-based Deloitte Touche Tohmatsu on
September 8 this year, will not be allowed to solicit the former clients for a period of two months.
The team, including former head of the Towers custody practice David Taplin, now head of custody consulting services at Deloittes, left Towers following an announcement that the firm’s global custody practice was to be run on a regional basis.
Justice Mandie ordered that until January 10, 2000 Deloittes be restrained from directly or indirectly approaching any of the 27 numbered clients of Towers Perrin set out in the company’s client list, in connection with any work in progress or proposals referred to Towers Perrin.
He commented that it would be
difficult to assess damage to the goodwill of Towers Perrin which might be caused if any current clients of its
custody practice moved to Deloittes.
“Such a movement of clients would stem from the springboard advantage arguably improperly gained by Deloitte in the circumstances which I have outlined. The balance of convenience dictates, I think, that this springboard advantage should be
neutralised in the form sought by
Towers Perrin,” Mandie said.
Justice Mandie also identified that questions remained as to whether former senior employees of Towers Perrin breached their duty of fidelity in holding discussions with Deloitte, noting: “There is evidence that Taplin was, during the course of his employment with Towers Perrin, co-ordinating the transition of the whole custody team from Towers Perrin to Deloitte.”
Steve Schubert, Australian head of Towers Perrin’s employee benefits services, said following the judgement: “We are determined that the actions of Deloitte, Taplin and others to, arguably, improperly seek to profit from our investment and take our intellectual capital, will not succeed.”
He says Towers Perrin will be pursuing a case for damages against Taplin and Deloittes and confirmed that Towers was changing the nature of its custody set-up. “Instead of having a global team we will managing clients on a regional basis.”
However, Taplin at Deloitte says the judge’s decision is a victory for the
former Tower’s team. “I believe this is a major major win because we were faced with the prospect of never working again.
“Towers Perrin were attempting to stop us from ever approaching any client of theirs anywhere in the world. The judge decided against this. He also found no evidence that we had taken any confidential advice or intellectual property from Towers Perrin.”
Taplin says he expects to receive a claim for damages from Towers, but adds: “We have been told that this will amount to zero because Towers Perrin are closing the business.” He says Deloitte is to launch a reverse damages claim against Towers Perrin, although declined to comment further.
A trial date for the full case is expected to be announced shortly. Hugh Wheelan