| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Wellington |
| Reference No | WA 138/09 |
| Hearing date | 10 Aug 2009 |
| Determination date | 18 September 2009 |
| Member | G J Wood |
| Representation | D Harvey ; I Hard |
| Location | Wellington |
| Parties | ERS New Zealand Ltd t/a Transpacific Industrial Solutions v Knight and Anor |
| Other Parties | Bob Morgan Drainage Ltd |
| Summary | BREACH OF CONTRACT – RESTRAINT OF TRADE – COMPLIANCE ORDER – Applicant sought compliance with employment agreement (“EA”) for first respondent to return all confidential information and prohibit use of confidential information - Applicant claimed first respondent breached EA relating to confidentiality and implied duties of loyalty and fidelity to applicant – Applicant informed first respondent new EA’s terms and conditions same as current EA – However new EA contained new six month covenant restricting first respondent from working for competitor – Covenant further prohibited solicitation of applicant’s employees and clients – First respondent accepted new EA – First respondent subsequently sought employment with second respondent, applicant’s competitor – Applicant discovered first respondent had emailed commercial information to second respondent while employed at applicant – Discovered first respondent emailed documents to personal address – Applicant claimed first respondent acted for second respondent’s benefit – Claimed first respondent’s misuse of confidential information caused applicant to lose business contract to second respondent - First respondent argued information used generally available and not confidential – Argued returned all confidential information - Employee (“X”) resigned from applicant and currently employed by second respondent – Applicant claimed X’s resignation due to first respondent soliciting applicant’s employees – Authority found restraint of trade covenant unenforceable for want of consideration – Found insufficient evidence to support claim first respondent misused confidential information for second respondent’s benefit – Found first respondent returned all confidential information – Found insufficient evidence first respondent breached non-solicitation clause – Found no evidence first respondent acted in bad faith – No breach – Compliance order declined - PENALTY – Authority found as claims against first respondent failed, second respondent could not be found to have cited any breaches - Penalty declined |
| Result | Applications dismissed ; Costs reserved |
| Main Category | Breach of Contract |
| Statutes | ERA s103A;ERA s127 |
| Cases Cited | Fuel Espresso Ltd v Hsieh [2007] ERNZ 60 |
| Number of Pages | 6 |
| PDF File Link: | wa 138_09.pdf [pdf 24 KB] |