Hong Kong: Team Move - The Potential Liabilities of the Team Head

Last Updated: 2 May 2011
Article by Francis Chan

When a number of employees are considering to leave their employment together and set themselves up in competition with the employer, they have to be aware of their implied duty of fidelity apart form their contractual duties and restrictions. This article will discuss certain acts and omission in relation to "team move" which may give rise to a breach of the employee's implied duty of fidelity.

Implied Duty of Fidelity

A contract of employment may set out the basic terms of employment. However, very important duties of an employee (e.g. duty of fidelity) will be implied by legislation and /or decision of the courts which also govern the employment relationship.

An employee's implied duty of fidelity can be broadly interpreted to mean an employee's duty to act loyally, in good faith and in the best interests of his/her employer's business. Duty of fidelity also includes honesty, obedience, diligence, competence and care.

Team Move

The success of a company depends on the specific knowledge, skill and connections of its key employees. It is very common for a company to recruit a whole team of employees from its competitors. For instance, a company may try to recruit a manager of its competitor and also make enquiries with that manager to see if other members of his team would like to join the competitor as well.

In such circumstances, the manager of the team must be very careful about what he can and cannot do under his contract of employment as well as his implied duty to act in the best interests of his current employer. Moreover, that manager also has a duty not to disclose any confidential information and trade secret of his employer.

Some employment contracts may contain specific provisions in relation to "non solicitation of colleagues" and "non competition" which govern the behaviour of employees if and when they are asked to approach their colleagues for a "team move". For instance, a contract of employment may stipulate that "An Employee should not solicit or entice away or endeavour to solicit or entice away any employee of the Employer" and "An employee should not solicit the custom of any person who is, or has been at any time in the previous 6 months, a customer of the Employer for the purpose of offering to such customer good or services similar to or competing with the Employer's Business." However, some employment contracts may be silent on the employee's obligations and restrictions in those respects.

In the absence of any relevant provision in the employment contract, the following cases may give you some examples of the action or omission which may be in breach of an employee's duty of fidelity concerning "team move".

The law related to "team move" has changed over the years. In GD Searle & Co Ltd v Celltech Ltd [1982] F.S.R. 92, Cummings Bruce L.J. commented that "In the absence of restrictive covenants, there is nothing in the general law to prevent a number of employees in concert deciding to leave their employer and set themselves up in competition with him." Such comments seemed to suggest that much can be done by the employees in relation to "team move" as long as there is no contractual restriction. However, in light of the following recent decisions of the court in England, the above comments may no longer accurately represent the law regarding the acts or omission of an employee in a "team move".

In UBS Wealth Management (UK) Ltd v Vestra Wealth LLP [2008] EWHC 1974 (QB), (a decision of the High Court of England in relation to a very large team move), Openshaw, J. commented that "it would be an obvious breach of their duty of loyalty and fidelity to the employer if senior employees kept silent when they knew of planned poaching raids on the employer's staff or clients and when that was encouraged and facilitated by them from within the company." The employees have failed to respect their employer's interest in maintaining staff stability which amount to a breach of their implied duty of fidelity. To prevent any future or further serious economic loss to UBS, UBS's application for injunction for springboard relief against the defecting employees was granted by the Court.

In Kynixa Ltd V Hynes and Others [2008] EWHC 1495 (QB) (another case decided by the High Court of England), the Court held that the Defendant who was a director, shareholder and a very senior employee of a company was in breach of his duty of fidelity when he failed to discuss and disclose to his employer about the active steps he was taking to explore the possibility of working for the employer's competitor and when he failed to inform his employer about the competitor's approaches made to him and other senior members of the company to join the competitor. The Defendant's actions were not consistent with the concept of loyalty which is a crucial aspect of the implied duty of fidelity. The Court also commented that the Defendant should take adequate steps to protect the business of the employer.

In Tullett Prebon PLC and others v BGC Brokers LP and others [2010] EWHC 484 (QB) (also a case decided by the High Court of England), it was held that "a duty of an employee is to protect his employer's interests. It may be a breach of duty to provide any information, confidential or not, to a rival of his employer if he knows that the information is to be used to assist the rival and to harm his employer." So, it can be seen that an employee always has a duty to act in the best interests of his/her employer.


The law has always looked with favour upon the efforts of employees to advance themselves, provided that they do not steal or use the secrets of their employers. However, when an employee (especially those in the senior position) has been approached or knows that other members of his/her team or colleagues have been approached by the employer's competitor, he/she has to consider what he/she should or should not do with reference to his/her contractual duties, obligations and restrictions. Moreover, he/she should also consider his/her implied duty of fidelity to act in the best interests of his/her employer and act accordingly.


The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.

For enquiries: Please contact members of our Employment, Privacy and Discrimination Practice Group.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions