| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2013] NZERA Auckland 549 |
| Hearing date | 19 Nov 2013 |
| Determination date | 28 November 2013 |
| Member | R Larmer |
| Representation | R Harrison ; J Dewar |
| Location | Hamilton |
| Parties | Amplifon New Zealand Ltd v Horsburgh |
| Summary | BREACH OF CONTRACT - RESTRAINT OF TRADE - Applicant claimed respondent breached restraint provisions in parties’ employment agreement - Respondent made redundant – Respondent offered alternative position – Terms of new role not as favourable as former – Applicant unwilling to vary restraint provisions – Respondent accepted new role - Employment agreement included six month non-competition and 12 month non-solicitation clauses – Non-competition clause prevented respondent from providing audiological services within 10km radius of applicant’s base clinics – Respondent made redundant from new role – Clinics respondent worked in closed - Respondent sought variation of restraint clauses – Applicant requested proposal from respondent - Respondent opened new clinic – Respondent’s daughter posted Facebook message inviting “lovely loyal faces” to new clinic - Newspaper advertisement included photo of respondent and welcomed “existing clients” – Applicant accepted 12 month non-solicitation clause unreasonable – Applicant sought modification of non-solicitation clause – Audiometrist |
| Abstract | AUTHORITY FOUND –;BREACH OF CONTRACT – RESTRAINT OF TRADE: Applicant should have ensured restraints reasonable and enforceable. Not adequate to say respondent should propose variation. Respondent never deliberately intended to solicit clients. Non-solicitation clause anti-competitive. Respondent saw approximately 2,650 clients while working for applicant. Enforcing non-solicitation in respect of all clients unreasonable. Lack of geographical restriction too wide. Not reasonable to prevent respondent competing within 10 km of base clinics when clinics respondent worked at closed. Redundancy makes restraint unfair. Unequal bargaining power when respondent entered into restraint. Restraint void and unenforceable. Not appropriate to modify restraint. No breach of restraint of trade. |
| Result | Application dismissed ; Costs reserved |
| Main Category | Restraint of Trade |
| Statutes | ERA s164 – ERA s164(d) - Illegal Contracts Act 1970 - Illegal Contracts Act 1970 s8 - Illegal Contracts Act 1970 s8(1) |
| Cases Cited | Asiaciti Trust New Zealand Ltd v Harris [2013] NZEmpC 178;C E Elley Ltd v Burgess (1997) 7 TCLR 582 |
| Number of Pages | 11 |
| PDF File Link: | 2013_NZERA_Auckland_549.pdf [pdf 239 KB] |