| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 325/06 |
| Hearing date | 22 Aug 2006 |
| Determination date | 24 October 2006 |
| Member | Y S Oldfield |
| Representation | R Hargreaves ; SJ Neville |
| Location | Auckland |
| Parties | I C Frith (NZ) Ltd v Young |
| Summary | DISPUTE - Restraint of trade - Application for declaration restraint of trade enforceable - Alternatively, asked Authority to modify restraint as deemed fair and reasonable - Respondent worked for company (T") when T sold to applicant's parent company - No written employment agreement with T - Respondent agreed to start work with applicant in expectation previous oral terms with T would continue - Applicant began paying respondent's wages before sale and purchase completed - Respondent received draft agreement containing restraint of trade clause - Agreement stated restraint was for period specified in "Schedule" to agreement, but no period specified in Schedule - Parties agreed restraints common in brokerage industry - Respondent claimed aware of clause but ignored it thinking did not apply as not in Schedule nor part of oral terms - Although parties' discussed other issues, did not discuss restraint - Clause not specifically drafted for employment agreement - Rather, clause appeared to have been included almost by default - No increase in respondent's remuneration, and employed almost four months when clause introduced - Not satisfied parties turned their minds to restraint at time agreement entered - Applicant claimed agreement contained express or implied restraint - Authority did not accept absence of specified period meant restraint of indefinite duration - Nothing specified, so period specified must be nil and restraint of nil duration - Agreement did not contain express restraint provision - Cases in which restraints implied distinguished - In present case negotiation and consideration for restraint absent - Unconvinced restraint could be implied - Whether Authority should modify duration of restraint did not fall to be determined - Insurance broker" |
| Result | Application dismissed ; Costs reserved |
| Cases Cited | Norris v Zealfresh International Ltd [1998] 3 ERNZ 574;United Pukekohe v Grantley [1976] 3 NZLR 762 (HC) |
| Number of Pages | 5 |
| PDF File Link: | aa 325_06.pdf [pdf 67 KB] |