| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 257/05 |
| Hearing date | 20 Apr 2005 |
| Determination date | 11 July 2005 |
| Member | K J Anderson |
| Representation | C Umbers, V Umbers ; G Brittain |
| Location | Auckland |
| Parties | Air8tors Ltd v Umbers |
| Summary | RESTRAINT OF TRADE - Employment agreement restrained applicant from working in New Zealand in any business similar to the business conducted by" respondent for period of three years following termination of employment - Applicant left employment in disputed circumstances and commenced work for competitor - Alleged "poaching" of customers and employee of respondent - New employer was in business "similar" to that conducted by respondent - Whether restraint unreasonable and unenforceable - Restraint was supported by valuable legal consideration in form of 20% shareholding in respondent - Respondent's client list was proprietary interest entitled to be protected - Restraint unreasonable and unenforceable as to industry, geographical and time limits - Restraint modified under s8(1)(b) Illegal Contracts Act 1970 to two years within particular region - Appropriate time limit determined with reference to amount of time taken for results of respondent's services to become evident to customers - Restraint in modified form to apply from date of termination of employment - Compliance ordered with modified restraint - Claim for damages for breach of restraint not supported by evidence - UNJUSTIFIED DISMISSAL - Counterclaim - Alleged dismissal through refusal to allow applicant to rescind verbal resignation or notification that employment agreement would not be "renewed" - Employment permanent despite provision in employment agreement for 12 monthly "review" - Applicant resigned - No dismissal - ARREARS OF WAGES - Counterclaim - Alleged failure to pay commission payments - No evidence applicant entitled to payments - Soil aeration marketing and sales" |
| Result | Application granted in part (compliance with restraint) ; Application dismissed (damages for breach for restraint) ; Applications dismissed (unjustified dismissal and arrears) ; Orders accordingly ; Costs reserved |
| Statutes | ECA;ERA s137;ERA s161;Illegal Contracts Act 1970 s8(1)(b) |
| Cases Cited | BFS Marketing v Field [1992] 2 ERNZ 1105;Dillon v Chep Handling Systems [1995] 2 ERNZ 282;Gallagher Group Ltd v Walley [1999] 1 ERNZ 490;M A Watson Electrical v Kelling [1993] 1 ERNZ 9;Medic Corporation Ltd v Barrett [1992] 3 ERNZ 523 ; [1993] 2 NZLR 122;Radio Horowhenua Ltd v Bradley [1993] 2 ERNZ 1085;Stenhouse Australia Limited v Marshall William Davidson [1974] AC 391 |
| Number of Pages | 9 |
| PDF File Link: | aa 257_05.pdf [pdf 60 KB] |