| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 96A/09 |
| Hearing date | 1 Apr 2009 |
| Determination date | 08 April 2009 |
| Member | D King |
| Representation | C Meechan ; S Cook |
| Location | Auckland |
| Parties | Diagnostic Medlab Ltd v Lloydd |
| Summary | INTERIM INJUNCTION – Application to enforce garden leave – Employment agreement (“EA”) provided employee must give 3 months notice of resignation and employer’s discretion to place employee on garden leave during notice period – Respondent pathologist at applicant company (“DML”) – DML provided laboratory services - Respondent resigned giving 3 months notice to take up employment at another laboratory, Lab Tests (“LT”) – DML immediately cut off respondent’s access to work email – DML discovered respondent made comments in media to entice DML staff to work for LT - Parties discussed whether respondent required to work out notice period – DML advised respondent would be placed on garden leave during notice period – DML did not seek respondent’s views and prohibited applicant from workplace – Respondent later requested DML consider early termination of employment relationship – DML applied for interim injunction directing respondent to observe obligations of confidentiality, good faith and fidelity towards DML – Authority found arguable case - Whether DML validly exercised discretion to place respondent on garden leave and whether respondent breached obligations towards DML serious questions to be tried – DML claimed balance of convenience in their favour because damages inadequate to compensate for respondent’s failure to observe obligations – Respondent would have “unfettered” ability to advance LT’s interests and entice other staff to leave without notice – Respondent claimed balance in their favour because respondent had sworn to observe obligations – Enforcement of garden leave for greater period than required would be unjustifiable covenant in restraint of trade and detrimental to respondent’s professional skills – DML no proprietary interest to protect – Found balance of convenience and overall justice favoured respondent – Little evidence of damage suffered by DML – Respondent prejudiced by having no access to laboratory and equipment to carry out continuing medical education requirements – Respondent not working for competitor therefore difficult to see what interests would be harmed - Application to enforce garden leave declined – Pathologist |
| Result | Application dismissed; Costs reserved |
| Main Category | Injunction |
| Statutes | Wages Protection Act 1983 s4;Wages Protection Act 1983 s5(1) |
| Cases Cited | American Cyanamid v Ethicon Ltd [1975] AC 396;Bank Xerox NZ Ltd v UBIX Copiers Ltd & Morton, unreported, Barker J, 20 Dec 1985, A1407/85;Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129;Ogilvy & Mather (NZ) Ltd v Darroch [1993] 12 ERNZ 58;X v Y Ltd and New Zealand Stock Exchange [1992] 1 ERNZ 863 |
| Number of Pages | 8 |
| PDF File Link: | aa 96a_09.pdf [pdf 28 KB] |