| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 241/09 |
| Hearing date | 30 Jun 2009 |
| Determination date | 17 July 2009 |
| Member | L Robinson |
| Representation | A Steele ; M O'Brien |
| Location | Auckland |
| Parties | Equico Equipment Finance Ltd v Enright |
| Summary | RESTRAINT OF TRADE – PENALTY – Applicant sought penalty against respondent for breach of restraint of trade clause – Applicant technology specialist company and respondent formerly employed as manager – Respondent aware of applicant’s intellectual property and had contact with applicant’s clients and vendors - When employment relationship ended, parties concluded settlement agreement – Agreement prohibited respondent from directly or indirectly canvassing, soliciting or attempting to solicit business, however, “social contact with representatives of applicant’s vendors” permitted – Respondent commenced employment with applicant’s competitor, Rentplus (“RP”) – Respondent organised conference and used RP’s email system to send email to applicant’s client “A” – Applicant claimed respondent used RP’s email to indirectly promote RP to A therefore attempted to solicit A – Respondent continued contact with applicant’s former clients – Applicant claimed respondent exploited “social contact” qualification which was intended to allow respondent to maintain genuine friendships – Respondent argued contact not business related - Respondent announced employment with RP in magazine advertisement – Magazine circulated to applicant’s target market – Applicant claimed advertisement placed in applicant’s “space” to invite applicant’s costumers to convert business - Respondent argued advertisement constituted invitation to treat because advertisement not directed at individuals – Authority found respondent’s involvement with A not soliciting because email did not “influence, entice, assiduously obtain or make request to convert business” – Found no evidence respondent’s interactions with applicant’s former clients constituted soliciting – Found advertisement an invitation to treat, not offer of business – Found an unavoidable consequence advertisement would reach applicant’s costumers when applicant and RP competed in same market – No beach of restraint of trade clause – Penalty declined - COUNTERCLAIM – Compliance order – Respondent sought compliance with settlement agreement on grounds respondent failed to pay correct amount of commission owed – Authority found applicant paid correct sum owed – Compliance order declined – Manager |
| Result | Application dismissed ; Counterclaim dismissed ; Costs reserved |
| Main Category | Restraint of Trade |
| Cases Cited | Austin Knight (UK) Ltd v Hinds [1994] FSR 52;Circle Pacific Asparagus Ltd v Pryce & Anor, unreported, Goddard CJ, 30 Jun 1995, WEC 42/95;Dee Jay Distributors Ltd v Country Fare Bakeries Ltd, unreported, Goddard CJ, 12 Apr 1995, WEC 24/95;Deloitte & Touche Group-ICS Ltd v Halsall, unreported, Colgan J, 24 Jul 1997, AEC 74/97;Hydra PLC v Anastasi &Ors [2005] EWHC 1559;Stenhouse Australia Ltd v Phillips [1974] AC 391;Sweeney v Astle [1923] NZLR 1198;TAP (New Zealand) Pty Ltd v Origin Energy Resources NZ Ltd, unreported, Miller J, 14 Feb 2006, CIV 2005-485-1500;Welsh v Cooney [1993] 1 ERNZ 407 |
| Number of Pages | 12 |
| PDF File Link: | aa 241_09.pdf [pdf 43 KB] |