| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2011] NZERA Auckland 536 |
| Hearing date | 1 Dec 2011 |
| Determination date | 16 December 2011 |
| Member | D King |
| Representation | D Sim ; M Wilson |
| Location | Auckland |
| Parties | O'Neill and Anor v Affco New Zealand Ltd |
| Other Parties | Warmington |
| Summary | RESTRAINT OF TRADE – Applicants claimed bound by unenforceable restraints of trade – Respondent claimed applicants entered into restraints freely and restraints enforceable – First applicant (“O”) commenced employment with employment agreement (“EA”) containing restraint and later signed new EA also containing restraint of trade - O intended to resign and advised respondent would consider staying if offered higher salary – Parties’ proposed new EA expressly provided part of salary related to restraint and applicant refused to sign new EA – Respondent removed provision and applicant accepted new position - Second applicant (“W”) also commenced employment with EA containing restraint – Applicants had access to confidential information including pricing, sales and suppliers – Authority found applicants had access to confidential information used by respondent as important tool – Found three months not unreasonable time period – Found although restraint not limited to specific area given nature of industry was not unreasonable – Found restraints reasonable and enforceable – Found applicants bound by restraints - BARGAINING – Applicants claimed when agreed to restraints respondent’s representations about enforceability of restraints rendered subsequent parties’ EAs unfair and unconscionable – Respondent’s director of operations (“O”) denied when bargained with applicants stated restraints were unenforceable – Applicants claimed relied on O’s representations when agreed to EAs – Found did not need to establish whether O made alleged misrepresentations as applicants successfully negotiated salary increases and both experienced negotiators – Found even if applicants relied on alleged misrepresentations applicants did so unreasonably – Found neither applicant induced into entering EAs by oppressive means – Applicants claimed no consideration for applicants accepting restraints – Found applicants’ EAs expressly referred to consideration for restraint – Applications dismissed - Plant Managers |
| Result | Applications dismissed ; Costs reserved |
| Main Category | Restraint of Trade |
| Statutes | ERA s68(2)(b);ERA s68(2)(c) |
| Cases Cited | Airgas Compressor Specialists Ltd v Bryant [1998] 2 ERNZ 42;Allright v Canon (2008) 6 NZELR 367;Gallagher Group Ltd v Walley [1999] 1 ERNZ 490;Littlewoods Organisation Ltd v Harris [1978] 1 All ER 1026 |
| Number of Pages | 6 |
| PDF File Link: | 2011_NZERA_Auckland_536.pdf [pdf 25 KB] |