The High Court has held that a top London model agent was in breach of contract by stealing models and confidential data for a model agency that he set up in competition with his employer.
Mr John Bruce, start of “The Model Agency”, commenced employment with Premier Model Management in 2001 as a “booker” – an employee who booked models for shoots. He soon became one of his employer’s most valuable employees – it is reported that he has been responsible for a third of his employer’s revenue in recent years.
However, it transpired that Mr Bruce was in fact going behind his employer’s back and signing models up to an agency that he set up with a friend, Paulo Ribeiro. The agency (named Paolo Ribeiro Management) was set up in 2010 and Mr Bruce was both a director and a shareholder. He attempted to cover up his involvement with the agency and the bookings that were taking place but his attempts were foiled when one of the co-founders of Premier Model Management, Mr Chris Owen, became suspicious and went through Mr Bruce’s emails. The email trail he found suggested that Mr Bruce had defrauded the company of over £20,000 in travel expenses and that he had been using the company’s confidential information to book models for Paolo Ribeiro Management.
Mr Owen subsequently sacked Mr Bruce for gross misconduct and issued a claim in the High Court for breach of contract, claiming damages and seeking an injunction. Bruce claimed that he had never used confidential information that he had access to at his employer and that he did not know that Mr Ribeiro had made him a director and 50 per cent shareholder in the firm. The High Court in fact found that Mr Bruce was in breach of his contract of employment (including breach of confidentiality) and that he had defrauded the business of tens of thousands of pounds of expenses. He was ordered to pay back the expenses and to pay Premier Management tens of thousands of pounds in compensation for modelling jobs that went to Paolo RIbeiro Management instead of his employer. Further, he was told that he would be responsible for Premier Model Management’s legal bill – estimated at £100,000 – and subjected to an injunction which prevents him from enticing away any model who has been with his employer since 2001.
This case is a warning to employees that if they set up in competition with their employer whilst still employed that they will be in breach of their contract of employment. Further, they must also be careful that they do not breach restrictive covenants otherwise they may be sued for breach of contract.