Creganna Ltd v Cullen and Another

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Oisín Quinn
• Judgment Date: 23 April 2024
• Neutral Citation: [2024] IEHC 231
• Docket Number: Record No.: 2024/1407P

Between:-

Creganna Limited

Plaintiff

and

Niall Cullen

and

Lake Region Medical Limited

Defendants

[2024] IEHC 231

Record No.: 2024/1407P

THE HIGH COURT

Judgment of Mr. Justice Oisín Quinn delivered on 23 April 2024

Introduction

1 The Plaintiff (‘Creganna’) relies on what it contends is a valid ‘non-compete’ clause in the contract of employment it has with the First Named Defendant (‘Mr. Cullen’) to seek an interlocutory injunction to restrain Mr. Cullen from taking up a job that has been offered to him with the Second Named Defendant (‘Lake Region Medical’). Mr. Cullen and Lake Region Medical contend that the ‘non-compete’ clause is clearly invalid and should be declared so at this juncture. Mr. Cullen also claims that Creganna have been guilty of delay in bringing on the application for interlocutory relief. Lake Region Medical claim that no actual interlocutory orders are sought against it. Finally, both Defendants claim the balance of convenience is in favour of refusing the relief not least because they claim that the likelihood is that the offer of employment will not be kept open if interlocutory relief is granted.

Background

2 Creganna is an Irish company based in Galway employing approximately 1,300 people and it operates within the TE Medical business unit of a global business known as TE Connectivity which in turn is owned by a Swiss company called Tyco Electronics Group S.A. TE Connectivity is apparently ranked as amongst the top ten global companies in the medical device outsourcing industry. The TE Medical business unit specialises in the design and manufacture of what are described as minimally invasive delivery and access devices for a range of medical therapies. TE Connectivity in turn employs approximately 90,000 people worldwide. TE medical devices are often incorporated into other medical devices that are sold to hospitals and healthcare providers by well-known global brand names such as Medtronic, Boston Scientific, Abbott, Philips, Siemens and others.

3 Lake Region Medical is also an Irish company which also has a facility in Galway. Lake Region Medical is part of a global business known as the Integar group of companies, and according to its deponent, it is involved in an $800m per year business ‘engaged in global innovative medical device manufacturing and design’. Integar and TE Connectivity are, certainly in some substantial respects, clearly competitors. They seek to design and make highly sophisticated parts for complex medical devices that are then incorporated into final products by substantial well known global businesses who sell these products under their own brand names to end users, such as hospitals. In many specific factual respects however, there was an amount of disagreement as between the various deponents as to the precise ambit and contours of the nature of the business and competition as between Integar and TE Connectivity.

4 Mr. Cullen has an impressive professional track record and impressive qualifications. The evidence indicates that he was clearly a highly regarded employee of Creganna who was promoted many times to positions of increasing seniority and leadership. He commenced employment with Creganna in November 2015 pursuant to a written contract of employment signed by him on 22 October 2015. He was initially employed as Creganna's European Sales Manager. His contract of employment contained a clause headed ‘Non-Compete’ (the terms of which are set out in the Schedule to this judgment). It also contained a clause entitled ‘Confidentiality’ and there was an additional document that Creganna claim was executed by Mr. Cullen entitled ‘Staff Member Confidentiality Agreement’. There may be a factual dispute about whether Mr. Cullen signed this second document. In January 2019 Mr. Cullen was promoted to the position of ‘Global Account Manager’. Creganna claims that Mr. Cullen's role changed in geographic scope at this point to one with global reach. In February 2020 his role changed again to one as ‘Product Manager’ with responsibility for a particular product line and Creganna claims that Mr. Cullen continued to maintain relationships with key decision makers in a number of the global companies that are its customers. Creganna also says that this role meant that Mr. Cullen became aware of what it claims is highly sensitive commercial information such as its pricing, manufacturing, cost and profit level strategies.

5 Creganna says that Mr. Cullen's performance was highly regarded and that in November 2021 he was promoted again, this time to the position of Senior Manager in Product Management. Then, he was further promoted in February 2022 to what is described as ‘Director Level’ for Product Management. The Product Management function involves, according to Creganna, providing leadership and seeking to connect engineering and operations.

6 By this time, Mr Cullen's salary had increased significantly, and he also had an entitlement to a substantial bonus, and he benefited from access to the TE Connectivity Long Term Share Incentive scheme. In his most recent position, Creganna says that Mr. Cullen had ultimate responsibility for profit and loss for the broader TE Medical Metals portfolio which is described as having a ‘multi-annual revenue’ running into hundreds of millions of Euros. This role included, according to Creganna, Mr. Cullen being the ultimate key decision maker on all new product designs within the ‘Metals’ business as they progress through the development pathway. In addition, it is claimed that from September 2023 Mr. Cullen was tasked with leading a cross functional task force working with a major customer which involved working with its Vice President of Global Supply Chain and its Director of Global Sourcing. This role, it is claimed gave Mr. Cullen access to valuable and commercially sensitive data relating to that customer's growth strategy and how it would be supported by Creganna. In addition, Creganna claim that Mr. Cullen's role gave him access to TE Medical's pricing strategy and that, in relation to one customer in particular, he had access to that customer's objectives and priorities, and it is said that Integar directly competes for that customer's business.

7 Overall, the Affidavit evidence of Creganna sets out what it claims is a significant amount of highly sensitive commercial information of the Plaintiff that is claimed to be in the knowledge of Mr. Cullen concerning, amongst other things, new technologies, costs and pricing strategies, customer programmes the subject of active bidding, capital investment plans and TE medical's strategies for various customers described as “ where we're going to play and how we're going to win”.

8 Mr. Cullen takes issue with several aspects of what is said about the precise nature of his roles and the information which he has acquired; although he does not dispute the generality of the assertion that he has acquired and is aware of commercially sensitive and confidential information of the Plaintiff.

9 Nonetheless, there is clearly a substantial factual dispute as to the precise ambit and nature of the various roles that Mr. Cullen has held in Creganna particularly in the context of precisely what information he has come into possession of and how commercially critical it is.

10 Equally, the affidavits disclose a factual dispute as to the context, nature and amount of contact Mr. Cullen has had with customers of the Plaintiff and secondly, how relevant that information might be to the decisions of customers to move their business from Creganna or, in the case of new business, to give their business to a rival.

11 There is also a significant dispute as to whether or not each promotion involved Mr. Cullen entering into a new contract of employment or a formal variation of his existing contract; each of which, the Plaintiff claims, involved the express incorporation of the aforementioned ‘Non-Compete’, ‘Confidentiality’ and ‘Staff Member Confidentiality Agreement’ terms being agreed again in, what the Plaintiff claims, was a new context. In that regard, the Plaintiff drew attention to the letter of 14 April 2022 concerning Mr. Cullen's appointment to the most recent position held by him of Director Product Management. This letter states, “Contract Start Date: 1 ^st May 2022” and also contains the phrase “All other terms and conditions of your employment will remain unchanged”. According to the Plaintiff's submissions this can be understood as reflecting a new contract of employment which contains the ‘Non-Compete’ clause. Whether this argument is correct or not has implications, the Plaintiff submits, for how the Court should approach the further question of whether a restraint of trade clause, such as the ‘Non-Compete’ clause, is valid or not.

12 On the other hand, on behalf of Mr. Cullen, for example, it is resolutely contended that these provisions even if they were agreed to (and there is a dispute about the terms of the ‘Staff Member Confidentiality Agreement’) were only agreed to in October 2015 in the context of the European Sales Manager role and therefore they have to be understood in that precise context only.

13 The foregoing is to leave aside for the moment, the separate dispute as to what the wording of those terms actually means.

14 The immediate background to these proceedings arises from an offer of employment made to Mr. Cullen by initially Integar it seems (‘Legal Entity Name: Brivant Limited’) on 12 January 2024. The letter of offer is dated the 12 January 2024 on Integar headed paper. It has subsequently been confirmed that Lake Region Medical “is the relevant entity for the purpose of this matter”. Mr. Cullen signed this letter apparently on 27 January 2024 and handed in his notice to Creganna on either the 29 or 30 Janaury 2024 giving two months notice. Creganna initially accepted this but now...