#4983 - Samengo Turner V. Marsh - Conflict of Laws BCL

Samengo Turner v. Marsh

Facts

This is an expedited appeal from David Steel J's refusal to grant the three claimants an anti-suit injunction to restrain proceedings against them in New York by the second and third defendants. The claimants are domiciled in England and are or were employed as reinsurance brokers by the first defendant (MSL), an English company and part of the well known Marsh McLennan group (the MM group) of companies of which the third defendant (MMC) based in New York is the holding company and the second defendant (GC) forms part.

The New York proceedings started a month later and are founded upon the terms of an incentive award granted to the claimants under which they assumed obligations to repay the award if they engaged in detrimental activity and to provide information to enable "the Company" to determine whether they had complied with the terms of the award.

The claim for an anti-suit injunction is made on the ground that the New York proceedings are matters relating to the claimants' individual contracts of employment and have been brought by their employer so the provisions of section 5 of Council Regulation (EC) 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters require such proceedings to be brought only in the courts of their domicile.

The Bonus Agreement:

The November 1 2005 Guy Carpenter Special Long Term Incentive Grant was made under the auspices of the plan. This award was subject to the terms and conditions of the plan itself and additional terms and conditions. The document containing these terms and conditions (which I shall call the bonus agreement) was signed by each claimant and recited that:

In recognition of your potential for future contributions to the success of MMC, this award is intended to strengthen the mutuality of interest between you and MMC's share holders and to serve as an appropriate additional incentive to remain with MMC or any of its subsidiaries or affiliates (collectively, the "Company"). For purposes of this agreement "MMC" means Marsh & McLennan Companies, Inc…

The bonus agreement runs to 16 pages. It was subject to New York law and exclusive jurisdiction except as provided by schedule II D.

Holding

Is the Bonus Agreement part of a contract of employment?

So is the claim made in New York a matter relating to the claimants' individual contracts of employment? It is obviously a "matter" and the word "individual" is apparently used to make it clear that section 5 does not apply to collective agreements. The words "relating to" are used throughout the Regulation. For the purposes of deciding this case it does not seem to me that they need to be given a wide meaning. The question is simply whether the claim is based on a contract of employment. The contract need not be in one document or made at one time. An agreement varying or adding to the terms of an earlier contract of employment will obviously become part of that contract even if on its own it does not contain all the terms one would expect to find in such a contract.

The claim in the New York proceedings is for breach of the bonus agreement. Did the terms of that agreement become part of the claimants' contracts of employment? Mr Rosen accepts, as he must, that the bonus agreements are connected to the claimants' employment by MSL but submits that they are free-standing and, as such, the judge was right to find that they do not have the hallmarks of contracts of employment.

I have only summarised the terms of the bonus agreement. But from those terms which I have quoted or referred to I can demonstrate why it is that I do not accept Mr Rosen's submissions. The recital refers to the award as an incentive "to remain with" MMC or any of its subsidiaries or affiliates. Payment of the award is subject to "your continued employment". The notice, non-solicitation, confidentiality, disclosure and co-operation covenants given to "the Company", which of course included MSL, add to and in some cases differ from the terms of the claimants' original contracts of employment with MSL. The non-exclusivity covenant ([9] above) purports to deal with any such conflict. The modified notice and non-solicitation covenants in schedule II D. for U.K. employees are given only to MSL as it is the U.K. company in the MM group employing the claimants. In short I cannot see how it can be said that the claimants' bonus agreements do not relate to their contracts of employment. They are part of them.

Was the suit brought by an “employer”?

So, given that the claim in New York relates to the claimants' individual contracts of employment, has it been brought by "an employer" within the meaning of Article 20? Mr Rosen's submission is simple: it has not; the employer, MSL, is not a plaintiff in those proceedings.

As a matter of English law at least, MSL is the claimants' employer and MMC and JC are not. It is of course possible for an employee to have two or even more employers but that is not the way the case is put. But on further consideration I do not think Mr Rosen is right. The question of whether MMC and GC should be regarded as employers for the purpose of section 5 has to be considered together with the fact that their claim in New York is a claim relating to a contract of employment brought against English employees. It is an employment claim against the employees and one would expect such a claim to be made by an employer. MMC and GC have only been able to sue in the right of and as if they were employers because of the wide definition of "the Company" in the bonus agreement and so I think they should be...