| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Christchurch |
| Reference No | [2014] NZERA Christchurch 31 |
| Hearing date | 12 Feb 2014 |
| Determination date | 21 February 2014 |
| Member | C Hickey |
| Representation | P Payton ; J Golstein |
| Parties | Sensi Mervale Ltd t/a Mod's Hair v Casey |
| Summary | RESTRAINT OF TRADE – INJUNCTION – Applicant sought interim injunction preventing respondent from breaching restraint of trade provision (“ROT”) in respondent’s employment agreement (“EA”) – Whether respondent bound by ROT in unsigned EA – ROT applied for 18 months within two kilometre radius of applicant’s business premises – Respondent resigned to work for competitor – Hair stylist |
| Abstract | AUTHORITY FOUND –;RESTRAINT OF TRADE – INJUNCTION: Arguable employee knowing about ROT but consciously deciding not to agree to ROT despite commencing employment in breach of duty of good faith. Arguable not equitable for party in breach of duty of good faith to benefit from EA and escape burden of agreement. Provision of intended EA to respondent day before respondent commenced work did not operate to nullify EA. Applicant’s acceptance of shorter notice period from respondent and failure to withhold training bond from final pay did not demonstrate applicant did not regard EA as binding. Respondent did not indicate agreement with written terms of intended EA. Respondent not senior employee. Intended EA never “executed” by signature in accordance with terms. Arguable intended EA did not establish terms and conditions of respondent’s employment and insufficient indication of agreement with EA as whole by respondent. Credible arguments both ways but arguable case respondent bound by ROT. Respondent’s recognition worked with mostly established clients of applicant suggested applicant had real proprietary interest worth protecting. Strongly arguable ROT would be upheld with perhaps shorter duration. Applicant in strong position to compensate respondent for lost wages and respondent’s new employer had different branches not falling within area covered by ROT. Balance of convenience favoured applicant. Respondent chose not to seek own legal advice and relied on belief not bound by unsigned EA. Overall justice of case favoured applicant. Application for injunctive relief granted. |
| Result | Application granted ; Costs reserved |
| Main Category | Restraint of Trade |
| Statutes | ERA s4;ERA s4(1);ERA s4(1A)(a);ERA s4(1A)(b);ERA s63A;ERA s63A(2)(c);ERA s64(6);ERA s64(6)(a);ERA s64(6)(b);ERA s67A;Wages Protection Act 1983 s4;Wages Protection Act 1983 s5 |
| Cases Cited | Airgas Compressor Specialists Ltd v Bryant [1998] 2 ERNZ 42;Brown v Middleton Transport Service Ltd [2013] NZERA Auckland 317;Dawnay Day & Co Ltd v de Braconier d’Alphen [1997] IRLR 285;Felthouse v Bindley (1862) 11 CB NS 869 ; 142 ER 1037;Hally Labels Ltd v Powell (2011) 8 NZELR 532;Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129;Maccaferri N Z Ltd v Langham unreported, P Cheyne, 10 April 2007, CA37/07;New Zealand Baking Trades Employees’ Industrial Union v General Foods Corp (NZ) Ltd [1985] 2 NZLR 110;Port of Wellington Ltd v Longwith [1995] 1 ERNZ 87;Pure Hairdressing Ltd v Kosmidakis [2012] NZERA Wellington 7;Ravensdown Corp Ltd v Groves [1998] 3 ERNZ 947;Rodwil Enterprises Ltd previously t/a War Hair Design v Dominguez unreported, R Arthur, 3 September 2007, AA272/07;Royal v Axon Computer Systems Ltd [1994] 1 ERNZ 312;Servilles Ltd v Whiting unreported, Colgan J, 2 June 2000, AC47/00;Smith v Stokes Valley Pharmacy (2009) Ltd [2010] ERNZ 253;Space Industries (1979) Ltd v McKavanagh [2000] 1 ERNZ 490;Sun Products New Zealand Ltd v Hunter unreported, Colgan J, 22 December 1999, AC109/99;X v Y Ltd [1992] 1 ERNZ 863 |
| Number of Pages | 18 |
| PDF File Link: | 2014_NZERA_Christchurch_31.pdf [pdf 238 KB] |