| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 283/08 |
| Hearing date | 4 Aug 2008 |
| Determination date | 08 August 2008 |
| Member | V Campbell |
| Representation | K Stretton ; D Andrews |
| Location | Tauranga |
| Parties | Florentines Patisserie v Bennett |
| Summary | COMPLIANCE ORDER – Restraint of trade – Applicant sought compliance with non-solicitation clause in employment agreement (“EA”) – Applicant claimed clause prevented respondent from working in product development for new employer (“M”) – Applicant also claimed respondent accessed applicant’s trade secrets on M’s behalf in breach of confidentiality clause in EA – Applicant claimed respondent approached supplier (“B”) of unique margarine product developed for applicant – Claimed unique margarine product formulated following trials by applicant’s food technologists – Respondent resigned from employment with applicant and entered into employment with M – Respondent also claimed applicant did not work out notice period – M manufactured same product as applicant – Authority noted restraint could be enforced if no wider than circumstances of case reasonably required – Respondent argued restraint provisions not enforceable because no protectable proprietary interest, too broad, and no consideration – Authority found applicant did have proprietary interest entitled to protection regarding recipes and processes – Authority found respondent oversaw trial processes and knowledgeable about recipes – Authority found reasonable for applicant to be entitled to short period of protection – Found 12 month restraint reasonable – Authority found no significant imbalance between parties when restraint stipulated as term of EA – Found respondent’s evidence that happy with agreement – Authority found respondent aware of restraint provisions before accepted employment – Found respondent had opportunity to obtain advice – Found respondent received consideration for promise to be bound by restraint – Compliance ordered with non solicitation clause – Authority accepted respondent’s evidence that unique margarine product not unique product developed for applicant – Respondent claimed M made enquiries about product before any contact with M – Authority found M aware product available from B before respondent employed by M – Found no breach of confidentiality clause in EA – Authority found applicant’s actions effectively waiver of respondent’s notice obligation – PENALTY – Applicant sought penalty for applicant’s breach of EA – Authority found in all circumstances penalty not appropriate – Operations manager |
| Result | Compliance partly ordered ; Penalty declined ; Costs reserved |
| Main Category | Breach of Contract |
| Cases Cited | Brown v Brown [1981] NZLR 484;Bates v Gates (1986) 1 NZELC 95;Gallagher Group Limited v Walley [1999] 1 ERNZ 490;Fletcher Aluminum Ltd v O'Sullivan [2001] 2 ERNZ 46;Fuel Espresso Ltd v Hsieh [2007] NZCA 58 |
| Number of Pages | 10 |
| PDF File Link: | aa 283_08.pdf [pdf 45 KB] |