Miss Hillary Fenton was employed to Sweets Catering Ltd as Director of Sales and Marketing. During her period of time with them she gained valuable information about the company's clients. Her employment contract stated that upon her resignation or any other form of termination "she is precluded from employment to any of the company's competitors or from soliciting any of the company's clients".

Hillary then resigned from Sweets Catering and formed a company called Tricks and Treats Catering Ltd, where she and her sister Melody Fenton were shareholders and directors. Melody was employed by Tricks and Treats as Sales and Marketing Manager while Hillary was employed by the company as Finance Manager.

Melody was given the list of clients of Sweets Catering that Hillary had copied before she resigned. Melody used this list to solicit the clients of Sweets Catering.

While Hillary was at work as she was heading to a meeting in the board room she slipped and fell because there was some water left on the floor by a cleaner employed by Tricks and Treat Catering. The company had taken out an Employers' Liability insurance to cover the company's liability to its employees for bodily injury and so Hillary made a claim on the policy. The insurance company is refusing to honor the claim by saying that Hillary is a director and shareholder of the company and therefore could no way be seen as an employee.

At the same time Sweets catering found out that Hillary's sister Melody is soliciting their clients and has sued Hillary for breach of the agreement not to solicit the company's clients.

REQUIRED

Using case law, advise Hillary on:

(a) How successful she is likely to be with her insurance claim?

(b) How successful she is likely to be in defending the breach of contract claim?

Answer rating: 100% (QA)

a The success of Hillarys insurance claim will depend on the definition of employee in the Employers ... View the full answer