In a standing case at the High Court, a signage supplier and associated service provider servicing major firms has accused a previous director and shareholder of establishing a new competing enterprise, violating the non-compete agreement at his exit.
Gary Upton, a stakeholder and director of Seretay Ltd, the parent company for the Image Quest group, held his post till November 2023. The group, operating under the name IQ Branding Solutions, delivers print, display, and signage solutions with clients like IKEA, Woodies, multiple shopping centres, Sherry FitzGerald, and the FBD Hotel Group.
One who “effectively operated” the company, Mr Upton managed key accounts and new business initiatives since joining as a director in 2011 alongside Jannetje Van Leeuwen and Paul O’Mahony.
In the previous year, talks for selling all shares owned by Mr Upton and sufficient shares from Ms Van Leeuwen and Mr O’Mahony to grant them majority control to a third party were initiated. However, the deal did not go through, with the cause yet unclear, as disclosed by Ms Van Leeuwen in an affidavit filed for seeking an injunction.
Zeahix Ltd and Buildixe, both having Ms Van Leeuwen in official positions, are taking legal action against Mr Upton along with Marketior Ltd and Monster Branding Ltd.
Mr Justice Brian Cregan sanctioned a temporary ex parte injunction on behalf of Zeahix and Buildixe, postulating that the hearing could resume the following week. As per the injunction, the accused are barred from poaching employees, soliciting customers, or engaging in competitive practices.
After the proposal to sell shares to a third party collapsed, Ms Van Leeuwen stated in her affidavit that Mr Upton extended a prospect to his fellow directors for buying his shares.
An agreement was struck following this, which saw Mr Upton and his firm Marektior receive €500,000, constituting a €114,000 increment on their shares’ market value, thereby offsetting a two-year non-compete clause integrated into the agreement.
Van Leeuwen further revealed that Mr Upton announced to customers and employees his resolution to venture into the health fitness domain, hinting at potential plans of inaugurating a gym.
Although the company experienced a decreased revenue in recent months, it was later discovered that Mr Upton, since leaving his previous firm, had begun to rival them. He was found to have enticed both clients and colleagues. In a shocking revelation, it appeared as if he had been attracting away from his preceding firm’s clients.
Earlier this month, an IQ staff member reported spotting a vehicle owned by an ex-employee from their company at Monster Branding, a business that Mr Upton had launched the previous March. This sighting incited a conversation over WhatsApp in which the ex-employee requested the current staff member to keep to himself the fact that Monster Branding was operational and competing. The former employee remarked, “But remember about this, it’s a big, big secret I think”.
Mr Upton reached out to the same IQ employee later, indicating that he was “back in action” and seeking a promise of confidentiality.
Ms Van Leeuwen confessed that she was appalled to uncover such an act of disloyalty by Mr Upton. On his departure, he had retained a company laptop and mobile, which, she believed, he had been misusing to promote his Monster Brand operations. It was also discovered that he had attempted to prompt clients, such as IKEA and JC Decaux, to support his new business venture.
A thorough review unveiled a significant decrease or complete halt in activities with certain clients over the recent months, possibly due to Mr Upton’s actions. Notably among these were Woodies, with a potential loss of around €80,000, Diamond Furniture losing approximately €68,000, and The Live Agency, Verve, experiencing a presumed loss of around €58,000, as stated by Ms Van Leeuwen.