Ocado settles litigation with former employees

25 June 2021

Ocado Group announces that it has settled its litigation with two former employees, Jonathan Faiman (who left in 2008) and Jon Hillary (whose employment was terminated in 2019) and the competing business they set up, Project Today Holdings Limited ("T0day"). The Defendants have made a significant payment to Ocado as part of the settlement.

A spokesman for the company said: “Ocado has never been stronger. Our people have built a great business. It is our duty to protect our people and their work from any unlawful and illegitimate use by third parties for their own ends.”

The settlement includes an Agreed Statement of Facts, in which the Defendants acknowledge, among other things, that:

• While still employed by Ocado, Hillary, at Faiman's request, provided Faiman with a significant number of confidential documents belonging to Ocado, including documents relating to the running of Ocado's automated warehouses and the key agreement under which Ocado would provide its online grocery technology to the joint venture with M&S.
• At the time that Ocado's search order was served on him, Faiman was on his way to a meeting with Waitrose with a significant number of these confidential documents in hard copy.
• The reason for obtaining these confidential documents was to use them for the purposes of T0day's business. Faiman also provided some of these documents to T0day’s advisors.
• In so doing, Faiman, T0day and Hillary breached their obligations of confidence to Ocado. Hillary breached certain contractual and fiduciary duties owed to Ocado and Faiman induced Hillary's breaches of contract.

The Agreed Statement of Facts is set out in full below.

As recorded in the Agreed Statement of Facts, Ocado has recovered the confidential information taken by the Defendants, and the High Court has made a permanent injunction, backed by a penal notice, preventing the Defendants from using the confidential information in the future.

This litigation (which included a multi-site search order against the Defendants), and the outcome of the proceedings, demonstrates that Ocado Group will take the strongest possible action against any individuals or companies to protect its interests. In particular, it will not hesitate to take any steps necessary to protect its extremely valuable intellectual property and know-how.

The settlement of the claim does not affect Ocado's committal proceedings against Raymond McKeeve, a former partner of the global law firm Jones Day, for contempt of court. These proceedings stem from the actions taken by McKeeve during the execution of Ocado's search orders against the Defendants, during which McKeeve instructed T0day's IT technician to "burn" a secure messaging platform used by the Defendants. The instruction led to the messaging platform, and all its contents, being irretrievably destroyed, preventing its contents from being searched. On February 8, 2021, the Court of Appeal gave permission to Ocado to continue with the committal proceedings, finding that McKeeve had "intentionally caused to be destroyed documentary materials which were of potential relevance to the claim”.

Agreed Statement of Facts:

   1.    The proceedings between Ocado, Project Today Holdings Limited ("T0day"), Mr Faiman and Mr Hillary have been settled on confidential terms, pursuant to which Mr Faiman, T0day and Mr Hillary have made a significant payment to Ocado. The following facts are agreed between the parties.

   2.    In May 2019, T0day signed a (predominantly non-binding) Term Sheet with Waitrose with respect to the provision of online grocery delivery services.  At around the same time, Mr Hillary gave notice of his resignation from Ocado, saying that he was going to work with Mr Faiman.

   3.    Shortly afterwards, Ocado learned that Mr Faiman had pitched the T0day business to M&S in around July 2018. Mr Hillary, while still an Ocado employee, joined Mr Faiman at one of the meetings with M&S and T0day.  At another of his meetings with M&S, Mr Faiman offered to show M&S a then current Ocado KPI document containing certain confidential information and indicated that T0day's financial models reflected this Ocado data. Mr Hillary was not present at that meeting but had given the Ocado confidential document to Mr Faiman.

   4.    Ocado obtained and executed search orders against Mr Faiman at the hotel where he was staying, against T0day at its office and against Mr Hillary at his home in early July 2019. The searches revealed that:

   4.1.    Mr Faiman was on his way to a meeting with Waitrose with a significant number of confidential documents belonging to Ocado in hard copy, including (among several other things) documents relating to the running of Ocado's automated warehouses, and the key agreement under which Ocado would provide its online grocery technology to the joint venture with M&S; and

   4.2.    Mr Hillary, despite having confirmed upon his resignation that he had retained no confidential information belonging to Ocado, was also in possession of a significant amount of Ocado's confidential information.

   5.    Mr Hillary disclosed that, in around March 2019 (two months before giving notice of his resignation), he knowingly provided Mr Faiman, at Mr Faiman's request, with various confidential documents relating to Ocado's business, including documents relating to Ocado's Smart Platform and the documents that Mr Faiman had with him when on his way to the meeting with Waitrose. The reason for obtaining these confidential documents was to use them for the purposes of T0day's business. Mr Faiman also provided some of these documents to T0day's advisors.

   6.    In so doing, Mr Faiman, T0day and Mr Hillary breached their obligations of confidence to Ocado. Mr Hillary breached certain contractual and fiduciary duties owed to Ocado, and Mr Faiman induced Mr Hillary's breaches of contract.

   7.    Mr Faiman, T0day and Mr Hillary have confirmed to Ocado that they no longer hold any Ocado confidential information, and that it has been deleted and/or returned to Ocado. They have agreed to be bound by a permanent injunction, ensuring that any confidential information held by them is deleted and prohibiting its future use by them. Any breach of this injunction shall constitute a contempt of court, potentially punishable by fine or imprisonment.

   8.    During the course of the proceedings, Mr Faiman and T0day (but not Mr Hillary) commenced a counterclaim against Ocado, alleging that the search orders were wrongly obtained, and/or were sought for an ulterior, abusive motive, namely to damage the reputation of Mr Faiman and T0day and to stifle legitimate competition. Mr Faiman formally abandoned the counterclaim on 1 February 2021 and T0day has now retracted those allegations in their entirety and withdrawn the counterclaim. Mr Faiman and T0day now accept that Ocado's search orders were properly obtained. Mr Hillary has never suggested that the search orders were improperly obtained and confirms that they were properly obtained.

A link to the McKeeve judgment can be found here.

A link to the Court Order involving Faiman, Hillary and T0day can be found here.