| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Christchurch |
| Reference No | CA 3/00 |
| Determination date | 22 December 2000 |
| Member | P Cheyne |
| Representation | D Rhodes ; R Chapman |
| Location | Christchurch |
| Parties | Elles Road Veterinary Centre v Watson |
| Summary | INTERIM INJUNCTION - Restraint of trade - 3 year period of restraint unreasonable - Damages an adequate alternative remedy - Balance of convenience favoured respondent - Veterinarian |
| Abstract | This was an unsuccessful application for an interim injunction enforcing a restraint of trade provision.;The respondent was a recently qualified veterinarian. He relocated to Invercargill to take up employment with the applicant employer (ERVC") commencing in January 2000. The respondent gave notice of resignation in July 2000, his employment terminating 3 months later. The respondent's written employment contract included a 3 year restraint of trade prohibiting competition within a 60 km radius of central Invercargill. The respondent took up new employment but ERVC would not agree to release him from the restraint. ERVC's evidence was that the respondent was privy to confidential information which gave them an advantage in the market place.;The respondent argued that he was not actively publicising his name in the new employment nor soliciting ERVC business or clients. The respondent argued that the restraint was unreasonable and unenforceable.;HELD: (1) The restraint in its current form was not arguably reasonable. In the context of the employment, 3 years was excessive even with the limited geographical coverage. ERVC had not identified any proprietary interest that should be protected. The employment contract included other specific provisions regarding confidential information. By asking in the Statement of Problem for a 6 month restraint, ERVC almost conceded that the restraint as drafted was unreasonable.;(2) The alternative remedy was damages and the actions of ERVC suggested that this would be an adequate alternative remedy. ERVC was prepared to negotiate suitable monetary compensation to release the respondent from the restraint.;(3) The balance of convenience favoured the respondent. He would be deprived of his current work for a period of time. That was significant at the formative stage of his veterinary career. He would lose more than just salary. The potential loss by ERVC was ameliorated by the respondent's sworn statement that he did not intend to advertise the fact of his new employment for at least 6 months. ERVC's case to modify and enforce the restraint was not strong. It was open to ERVC to pursue a substantive application to modify the restraint under the Illegal Contracts Act 1970." |
| Result | Application dismissed ; Costs reserved |
| Statutes | ERA s164;ERA s242;Illegal Contracts Act 1970 |
| Cases Cited | Airgas Compressor Specialists Ltd v Bryant [1998] 2 ERNZ 42 |
| Number of Pages | 3 |
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