| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2013] NZERA Auckland 341 |
| Hearing date | 16 Jul 2013 |
| Determination date | 07 August 2013 |
| Member | A Fitzgibbon |
| Representation | E Bluegum ; R Daniels (in person) |
| Location | Auckland |
| Parties | Mobile Vehicle Tuning & Servicing (2005) Ltd v Daniels |
| Summary | RESTRAINT OF TRADE – INJUNCTION – BREACH OF CONTRACT – PENALTY – Applicant sought injunction restraining respondent from further breaches of non-competition and confidentiality clauses in respondent’s employment agreement, and damages and penalties for previous breaches – Respondent entered into new employment agreement but not informed new agreement included variation of non-competition clause – New non-competition clause prevented respondent from competing with applicant in greater Auckland area for six months following termination of employment – Respondent resigned to set up own mobile vehicle business – Whether non-competition clause should be modified – Whether respondent utilised confidential information – Applicant had earlier engaged marketing company to propose options for rebranding – ‘Go Garage’ proposed to applicant – Applicant registered ‘Go Garage’ domain and company name but did not rebrand – Respondent’s new business named ‘Garage on the Go Limited’ – PENALTY – GOOD FAITH – Applicant sought penalty for respondent’s beach of good faith – Automotive technician |
| Abstract | AUTHORITY FOUND –;RESTRAINT OF TRADE – INJUNCTION – BREACH OF CONTRACT – PENALTY: Restraint would on face cover all businesses in greater Auckland area providing any automotive servicing and repair work. Restraint too wide, unreasonable and unenforceable. Wage of $27.50 per hour not adequate consideration for wide and onerous restraint. Restraint not warranted in circumstances. Clause should not be modified. No evidence applicant used confidential information for own benefit. Confidentiality clause did not establish what applicant considered confidential information. Respondent’s wife came up with company name independently. No breach of restraint of trade or confidentiality clauses. Application for injunctive relief declined. No breach of contract. No penalty.;GOOD FAITH: Applicant did not attempt to hide intention to start new business. No breach of good faith. No penalty. |
| Result | Applications dismissed ; No order for costs |
| Main Category | Restraint of Trade |
| Statutes | ERA;ERA s4;Illegal Contracts Act 1970 s8 |
| Cases Cited | Airgas Compressor Specialists Ltd v Bryant [1998] 2 ERNZ 42;Allright v Canon New Zealand Ltd (2008) 6 NZELR 367;Big Save Furniture Ltd v Bridge [1994] 2 ERNZ 507;Herbert Morris, Ltd v Saxelby [1916] AC 688;Lansing Linde Ltd v Kerr [1991] 1 WLR 251;Littlewoods Organisation Ltd v Harris [1977] 1 WLR 1472;Transpacific Industries Group (NZ) Ltd v Harris (2013) 10 NZELC 79-029 |
| Number of Pages | 14 |
| PDF File Link: | 2013_NZERA_Auckland_341.pdf [pdf 259 KB] |