| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2013] NZERA Auckland 479 |
| Hearing date | 9 May 2013 |
| Determination date | 18 October 2013 |
| Member | T G Tetitaha |
| Representation | B Edwards, R Bryant ; G Bennett |
| Parties | Tints New Zealand Ltd t/a Tint Guard v Poole and Ors |
| Other Parties | Borges, X Pert Window Tinting Ltd |
| Summary | RESTRAINT OF TRADE – BREACH OF CONTRACT – INJUNCTION – Applicant sought damages for first and second respondents’ breach of restraint of trade provision (“ROT”) in employment agreement and injunction preventing further breaches – Non-competition clause applied for 12 months after termination of employment and radius of 25km from applicant’s premises – First and second respondents resigned to set up third respondent – Employment agreement not signed by first respondent – Whether applicant had proprietary interest to be protected – Whether first and second respondents diverted business to third respondent and made adverse comments about applicant – GOOD FAITH – Applicant sought damages for first and second respondents’ breach of good faith – Whether first and second respondents performed work for own profit during employment – Whether applicant consented to work occurring – Workshop managers |
| Abstract | AUTHORITY FOUND –;RESTRAINT OF TRADE – BREACH OF CONTRACT – INJUNCTION: No conduct evidencing first respondent’s agreement to ROT. ROT unenforceable against first respondent. Trade experience of applicant’s director not applicant’s proprietary interest. No evidence of applicant’s marketing position to be protected. Little evidence first and second respondents received training or information advancing knowledge or skills possessed already. First and second respondents not salespeople and no proof of development and maintenance of close personal associations with applicant’s customers or suppliers. No evidence third respondent approached applicant’s clients during first and second respondents’ employment. No proof of damage to applicant. Facebook posting equivocal about disparaging remarks about applicant and evidence of client comments hearsay. Applicant’s display board and signage publically available and not trade secret. Applicant’s director’s ownership of “job board” operating system meant rights not protected by ROT. No evidence respondents used certain technique as opposed to existing knowledge. No evidence of solicitation of applicant’s staff. No proprietary interest capable of protection by ROT. No breach of contract. Application for injunctive relief declined.;GOOD FAITH: No direct evidence first respondent undertook private jobs during employment. Illogical and unlikely applicant would grant permission for second respondent to act in competition during employment. Second respondent breached duty of good faith by undertaking private jobs during employment without applicant’s consent. Second respondent to provide details of private work performed during employment with applicant. |
| Result | Application partially granted (good faith) ; Orders made ; Applications dismissed (restraint of trade)(breach of contract)(injunction) ; Costs reserved |
| Main Category | Restraint of Trade |
| Statutes | ERA s4;ERA s64(6)(b);Wages Protection Act 1983 |
| Cases Cited | A B Consolidated Ltd v Europe Strength Food Co Pty Ltd [1978] 2 NZLR 515;Decom Ltd v Cleaver unreported, P Cheyne, 24 March 2009, CA2A/09;Deloitte & Touche Consulting Group-ICS Ltd v Halsall unreported, Colgan J, 24 July 1997, AEC74/97;Felthouse v Brindley (1862) 11 CBNS 869 ; 142 ER 1037;Herbert Morris, Ltd v Saxelby [1916] AC 688;Jerram v Franklin Veterinary Services (1977) Ltd [2001] ERNZ 157;Kiwis Stat Ltd v Nichols [2010] NZEmpC 151;Medic Corp Ltd v Barrett [1992] 2 ERNZ 1048 ; [1993] 2 NZLR 122;Royal v Axon Computer Systems Ltd [1994] 1 ERNZ 312;Space Industries (1979) Ltd v McKavanagh [2000] 1 ERNZ 490;Tints New Zealand Ltd t/a Tint Guard v Poole [2013] NZERA Auckland 54;Tisco Ltd v Communication & Energy Workers Union [1993] 2 ERNZ 779 |
| Number of Pages | 10 |
| PDF File Link: | 2013_NZERA_Auckland_479.pdf [pdf 182 KB] |