Eleven thousand files and an external hard drive: EMJ v Mekina

On 17 August 2026 the High Court handed down judgment in EMJ Plastics Limited v Mekina Industries Limited, Baggaley and Johnson [2026] EWHC 2163 (Ch). Recorder Douglas Campbell KC found that a senior operations manager copied 11,579 of his employer’s files onto an external hard drive during his notice period, used them to build a competing business, and then lied about all of it in the witness box. It makes no new law, which is why it is worth reading. It shows where an owner-managed business protects itself and where it does not.

What happened

EMJ makes permanent formwork panels used in bridge construction. Ian Baggaley ran its operations day to day from 2016 until April 2022; Mark Johnson was production manager until February 2022. Both had twelve month non-compete covenants, which expired in early 2023. In June 2023 they set up Mekina Industries with Dura Group, which invested £200,000 for half the equity. Mekina now competes with EMJ.

Mr Baggaley’s case was that a director had asked him to copy the files as part of a plan to remove the managing director, and that he had handed the drive back. The judge rejected all of it. He copied the files because he intended to use them in a competing business, and invented the story to explain away the forensic evidence.

Preparing to compete is lawful. Taking the filing cabinet is not

There was nothing objectionable about the two men planning to enter the market once their covenants expired, or meeting an investor with that in mind. The law lets employees prepare. The line was crossed by taking the employer’s confidential material to make that start faster and cheaper.

It is important to note from where the protection came. The covenants in their contracts of employment expired in early 2023 and did almost no work in the case. What did the work was the contractual confidentiality wording, the express obligation to return company property, the implied duty of fidelity, and the equitable duty of confidence, none of which is time limited in the same way. If your contracts of employment are strong on covenants and vague on confidentiality and return of property, you have protected yourself for a year. The same goes for settlement agreements: Mr Johnson signed one on the way out, and his later use of EMJ material breached that too.

The defendants also argued that EMJ had not said precisely enough what was confidential. That requirement is real, and it is where these claims often fail. Here the judge held that properly identified examples within the pleaded categories were enough, and that requiring EMJ to analyse all 11,000 plus files and sort them into categories would have been disproportionate. That is encouraging, because the cost of proving misuse is what stops most businesses litigating.

Fiduciary duties reach below board level

Mr Baggaley was not a director. He still owed fiduciary duties. What mattered was his actual position: day to day charge of the business for most of a decade, a managing director based elsewhere, occasional reports direct to the board, and the trust placed in him. His lack of access to financial information was not decisive.

What followed, said the Court, was if an employee was senior enough to owe a duty to report other people’s misconduct must also report his own. So Mr Baggaley was obliged to tell EMJ what he had done, and his failure to do so was a breach of fiduciary duty in its own right. Job titles are not the test. If someone runs your site while you are elsewhere, the law may well treat them as owing you more than their contract says.

The worst leak came from someone who had not left

EMJ kept an internal Hot List of sales prospects, with customer names, contacts and values, restricted to senior sales staff. In December 2022 EMJ’s own business development manager emailed it to Mr Johnson under cover of the words “Obviously you have no idea where this came from”. Mr Johnson replied within twelve minutes pressing for the values that had been stripped out. The judge found he wanted the material to build a business plan on EMJ’s figures, and that the list was later used to target EMJ’s customers.

Access control is necessary and nowhere near sufficient. The list was properly restricted and still left the building in one email.

Lying cost them more than the lie

Having found that both men lied, the judge twice recorded that he had no confidence proper disclosure had been given. That neutralised the defendants’ best argument, that their own disclosure revealed no evidence of misuse. Once the court does not trust you, missing documents stop helping you and start hurting you. If a dispute looks likely, preserve everything.

What the claimant lost

EMJ did not win everything. The copyright claim failed because it never identified the drawings it was relying on or established that it owned the copyright in them. Worth checking whose drawings you own: an employee’s work is yours by default, a contractor’s is not unless it has been assigned to you in writing. The claim that the products themselves were suspiciously similar also failed, because the similarities could equally have come from the experience the two men were entitled to take with them. General skill and knowledge picked up on the job belongs to the employee, not to you.

Lessons for small businesses 

• Review access on the day notice is given, log data movement during the notice period, and take written confirmation of return and deletion on the last day.
• Make confidentiality and return of property express contractual obligations, and repeat both in any settlement agreement.
• Watch volumes rather than content: copies to external drives, personal email traffic, unusual file access by someone leaving.
• Keep records of who created your drawings, and take written assignments from contractors.
• Investing in a team that has left a competitor? Ask what they brought with them, and take warranties and an indemnity. Dura invested £200,000 and now owns half a company found liable.

This was a decision on liability only, the relief is still to be decided.

The long and short of this case is this: restrictive covenants will expire. They can be good, but my general advice to people like Mr Baggaley is often ‘wait 12 months’ to get around the covenants. However, in this case, it was all the other protections that caught them.

If you are dealing with a senior employee who has left with more than their experience, get in touch.