Key employment law cases: January 2020

Privilege: documents incorporated into Settlement agreements risk losing privileged status

BGC Brokers LP & ors v Traditions (UK) Ltd & ors – Court of Appeal – 18 November 2019

The Court of Appeal allowed defendants to inspect an unredacted copy of a settlement agreement between two of the parties, incorporating sensitive confidential information. BGC brought claims against various defendants, including former employee Mr Cuddihy, for sharing confidential information with a competitor. BGC and Mr Cuddihy entered into a settlement agreement, in which he warranted that he had provided full disclosure of the confidential information supplied to others by reference to documents that had been attached to and incorporated into the agreement.

The Court referred to the long-established principle that since the purpose of the settlement agreement is not to negotiate but to conclude the dispute, it is not covered by without prejudice privilege. It followed that by incorporating documents into the agreement they were also no longer protected. Equally, there was no protection from litigation privilege because the purpose of incorporating the documents was to obtain the benefit of the warranty and not to gather evidence for the litigation. Employers are reminded that confidential documents should not be incorporated into settlement agreements without the risk of losing any privileged status.

Discrimination: belief that gender is immutable biological fact could not be protected as philosophical belief

Forstater v CGD Europe & ors – Employment Tribunal – 18 December 2019

An employment tribunal has ruled at a preliminary hearing that the belief that gender is biologically determined at birth and immutable thereafter cannot be protected as a philosophical belief under the Equality Act 2010. Judge Tayler held that the Claimant’s belief did not meet the legal test because it was not worthy of respect in a democratic society, incompatible with human dignity and conflicted with the fundamental rights of others.

The decision appears to be quite specific to its facts. The Claimant had become involved in a debate about transgender on Twitter, campaigning against revisions of the Gender Recognition Act 2004 to allow people to change their gender through self-identification. Complaints were made to her employer that her tweets were “transphobic” and her contract was not renewed. The tribunal took the view that her belief could not be protected because it led her to “misgender” people, which would likely constitute unlawful harassment, and was incompatible with human dignity.

Discrimination: ethical veganism protected as philosophical belief

Casamitjana v League Against Cruel Sports – Employment Tribunal – 03 January 2019

In another preliminary hearing, the tribunal ruled that ethical veganism did meet the legal test to be protected as a philosophical belief under the Equality Act 2010. The Claimant was dismissed for gross misconduct by the League Against Cruel Sports (LACS), which he alleges was because he blew the whistle about pension fund investments in firms involved with animal testing. LACS actually conceded that ethical veganism amounted to a philosophical belief but denies that was the reason for his dismissal. Nonetheless, the Judge considered it was necessary for the tribunal to make its own finding.

Again, the test was applied specifically to the facts. It may be that the beliefs of other vegans may not meet the test, for example, “health vegans” who eat a plant-based diet for health reasons may be distinguished from “ethical vegans” who recognise non-human animals as sentient beings that it is morally wrong to harm or exploit which extends beyond dietary considerations.

Written reasons for the judgment have not yet been published. The substantive hearing is listed for February. We will keep you updated. In the meantime, it is sensible for employers to be mindful of such beliefs and consider whether vegans are appropriately catered for.

Whistleblowing: no protection from detriment suffered in private capacity and not within employment field

Tiplady v City of Bradford Metropolitan District Council - Court of Appeal – 11 December 2019

The Court of Appeal has held that there is no protection from detriment suffered by a worker in their private or personal capacity and not in the field of employment under section 47B of the Employment Rights Act 1996. The Claimant was a planning officer employed by Bradford Council. She considered that the Council had been unreasonable in its dealing with issues relating to a sewer and the construction of a shed at her property in the local Council area. As a result, she lodged a grievance and later resigned, claiming automatic unfair dismissal for whistleblowing.

The Claimant argued that an employer may have the power to harm the worker in their private capacity and the crucial concept was whether there had been abuse of that relationship. However, the Court took the view that the detriments complained of concerned the Claimant in her capacity as a householder and not an employee. To be protected, any such detriment must fall “within the employment field”. However, it highlighted that “the boundaries of the employment field should not be drawn narrowly” and that there are bound to be borderline cases so this case should not be “definitive guidance”.

Restrictive covenants: Supreme Court hands down costs order in Tillman v Egon Zehnder, requiring EZ to pay costs of High Court litigation

Tillman v Egon Zehnder Ltd – Supreme Court – 10 December 2019

The Supreme Court has handed down its costs order in the case of Tillman v Egon Zehnder Ltd of earlier this year (July 2019), requiring Egon Zehnder Ltd (EZ) to pay the costs of the litigation in the High Court.

In short, Tillman’s case was that, because the words “interested in” in the non-compete restriction in her employment contract prevented her from holding even a minority shareholding in a competitor, the covenant was wider than necessary to protect EZ’s interests and therefore void as an unreasonable restraint of trade. The Supreme Court agreed that the words “interested in” stretched the protection too far, but found in EZ’s favour on the basis that the words could be severed out of the covenant to rescue it. In doing so, it overruled existing case law and developed a new easier test for severance.

The Supreme Court judgment of July 2019 hinted at what was to come, referring in its conclusions to the unreasonable parts of post-employment restrictions as “legal litter” that “cast an unfair burden on others to clear them up” and that “there might be a sting in the tail”. The sting proved to be quite a big one …. it has awarded Tillman the costs of the original hearing (despite her being the losing party ultimately) and no order as to costs in the subsequent appeals in the Court of Appeal or Supreme Court.

The case is a warning to employers that although the test for severance might now be easier, they should not rely on the courts to blue-pencil unreasonably wide restrictions unless they are prepared to fund the costs of resulting litigation.

Read our Insight on the full judgment.

For more key employment law updates from us:

• read our Insights on key developments over the last month;
• stay Ahead of the Curve with our summaries covering the key aspects of employment law under review by the government;
• scroll through our key dates timeline showing recent and anticipated changes to employment law; and
• attend our upcoming events or catch up on training.