The Court of Appeal has given a wide interpretation to the meaning of ’employer’ in the recast Brussels Regulation (No 1215/2012), holding that a company which provides benefits to employees of associated group companies may be regarded as an employer if it provides the benefits to reward and encourage the employees for the benefit of their employer and the group as a whole: James Petter v EMC Europe Limited and EMC Corporation  EWCA Civ 828.
A US parent company providing stock options could therefore be sued as an ’employer’ in England by a former employee of its English subsidiary, and it could not rely on an exclusive jurisdiction agreement in favour of the Massachusetts courts. An anti-suit injunction was also granted, prohibiting the parent company continuing US proceedings brought against the employee.
The facts of the case are similar to those in Samengo-Turner v J & H Marsh and McLennan (Services) Ltd [2007 EWCA Civ 723 which has attracted substantial academic debate and criticism over the years. The Court of Appeal in the present case considered itself bound by Samengo-Turner to grant the anti-suit injunction. Given a free hand, Lord Justices Moore-Bick and Sales would have reached the same conclusion as the court in Samengo-Turner. Lord Justice Vos, however, clearly had doubts over whether the case was correctly decided, so the controversy over that decision continues.
The Petter case is a reminder that the court will look at substance rather than form in deciding who is an employer under the Regulation and that a jurisdiction agreement, whether in favour of an EU or non-EU court, is unlikely to be effective from an employer’s perspective. The case also shows that, in order to protect an employee’s rights, an anti-suit injunction will ordinarily be granted restraining an employer from bringing or continuing proceedings outside the EU. That injunction may even extend to ordering the employer to withdraw motions filed in the overseas proceedings, at least where there is evidence that it is seeking to pre-empt the English proceedings (as confirmed in the supplementary judgment of the Court of Appeal in this case). Continue reading