| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2015] NZERA Auckland 300 |
| Hearing date | 13-Apr-2015 - 14-April-2015 ; 12-Jun-2015 ; 4-Aug-2015 (4 days) |
| Determination date | 29 September 2015 |
| Member | Eleanor Robinson |
| Representation | D Fleming ; T Oldfield, P Davey |
| Location | Auckland |
| Parties | E-Lighting Ltd v Dickens and Ors |
| Other Parties | Peter, Hunza Production Ltd |
| Summary | RESTRAINT OF TRADE – Applicant sought to enforce restraint of trade (ROT) provisions – PENALTY – GOOD FAITH – Applicant sought penalties for first and second respondents’ breach of implied terms of good faith and fidelity and unfair competition against applicant – Applicant sought penalty for third respondent aiding and abetting breaches by first and second respondent - BREACH OF CONTRACT – Applicant sought damages for first and second respondent’s breach of employment agreements (“EAs”) |
| Abstract | AUTHORITY FOUND –;RESTRAINT OF TRADE: ROT provisions not contained in applicable EAs. While ROT provisions contained in previous EAs, not sufficient to show that ROT terms should be implied into applicable EAs. Onus on applicant to ensure that ROT provisions included. Respondents not subject to ROT provisions with applicant.;PENALTY – GOOD FAITH: Employment relationships contain reciprocal duties of fidelity and good faith, so first and second respondents subject to such duties. First respondent made improper financial gains through employment at applicant, promoted own products rather than applicant’s products, took confidential information, discussed matters with third respondent that had potential to affect applicant’s business and recruited second respondent away from applicant. First and second respondent prepared to go into competing business with employed at applicant, failed to alter applicant of risk to relationship with third respondent and discussed intended resignation with third parties, including third respondent. $10,000 penalty appropriate for first respondent. Second respondent also acted without authority in manner that caused concern to third respondent about applicant’s performance. $3,000 penalty appropriate for second respondent. Third respondent encouraged first and second respondents to resign employment with applicant and go into competing business. Third respondent aided and abetted breaches by first and second respondents. $10,000 penalty appropriate for third respondent.;BREACH OF CONTRACT: First and second respondents breached employment obligations. First and second respondents to pay applicant damages, quantum to be determined. |
| Result | Applications granted (penalty – good faith)(breach of contract) ; Penalty ($10,000)(first respondent)(payable to applicant) ($3,000)(second respondent)(payable to applicant) ($10,000)(third respondent)(payable to applicant) ; Damages (quantum to be determined) ; Application dismissed (restraint of trade) ; Costs reserved |
| Main Category | Penalty |
| Statutes | ERA s63A;ERA s63A(2)(a);ERA s64;ERA s134;ERA s134(1);ERA s134(2);ERA s135;ERA s136(2) |
| Cases Cited | Auto-Movements (NZ) Ltd v Eveleigh [2007] ERNZ 370 (EmpC);Credit Consultants Debt Services NZ Ltd v Wilson (No 3) [2007] ERNZ 252;E-Lighting Ltd v Dickens [2015] NZERA Auckland 61;Foai v Air New Zealand Ltd [2012] NZEmpC 57, [2012] ERNZ 229;Rooney Earthmoving Ltd v McTague [2009] ERNZ 240 (EmpC);Space Industries (1979) Ltd v McKavanagh [2000] 1 ERNZ 490 (EmpC);Tisco Ltd v Communication & Energy Workers Union [1993] 2 ERNZ 779 (CA);Xu v McIntosh [2004] 2 ERNZ 448 (EmpC) |
| Number of Pages | 27 |
| PDF File Link: | 2015_NZERA_Auckland_300.pdf [pdf 342 KB] |