| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2011] NZERA Auckland 267 |
| Hearing date | 20 Jun 2011 |
| Determination date | 21 June 2011 |
| Member | D King |
| Representation | D Erickson ; G Stone |
| Location | Auckland |
| Parties | Transpacific Industries Group (NZ) Ltd v Harris and Anor |
| Other Parties | Smart Environmental Ltd |
| Summary | INJUNCTION – RESTRAINT OF TRADE - Application for injunctive relief restraining first respondent (“H”) from working for competitor or approaching or soliciting H’s customers – Employment Court (“EC”) previously held restraint of trade clause preventing H from working for competitor for three months (“three month clause”) arguably unenforceable – EC held restraint clause preventing H from soliciting or approaching applicant’s clients arguably reasonable – Applicant claimed modifying competitor definition in three month clause would address EC’s concerns - H advised applicant considering employment offer from second respondent (“SEL”) and confirmed resignation same day – Applicant claimed H had significant access to confidential information including products, pricing and contracts – Applicant requested H reveal identity of new employer - Applicant sent H statutory declaration requiring H to confirm would comply with employment agreement – As applicant refused to provide legal advice H did not sign declaration – Applicant claimed H attempted to solicit business from applicant’s client – Applicant refused H and SEL’s offer would provide undertaking would not solicit clients H had previously dealt with - Two of H’s clients terminated contract with applicant after approached by H – Applicant claimed Authority should consider particular factual setting despite EC’s finding three month clause arguably unenforceable – Authority found three month clause anti-competitive, unreasonable and unenforceable even taking into account applicant’s proposed modifications – Found clients approached by H not those H had dealt with when employed by applicant – Found not strongly arguable H had acquired confidential information about clients – Found balance of convenience did not favour applicant or H – Applicant claimed unreasonably delayed in taking action as did not know SEL was new employer – Applicant claimed failure to disclose new employer breached H’s fidelity and good faith obligations – Authority found H would suffer financially and SEL’s business would be disrupted for a short period if H prevented from dealing with existing clients - Found overall justice favoured H as applicant unlikely to obtain permanent injunctive relief – Application for injunctive relief dismissed - Business Development Manager |
| Result | Application dismissed ; Costs reserved |
| Main Category | Restraint of Trade |
| Statutes | Illegal Contracts Act 1970 s8 |
| Cases Cited | Green v Transpacific Industries Group (NZ) Ltd [2011] NZEMPC 6 |
| Number of Pages | 9 |
| PDF File Link: | 2011_NZERA_Auckland_267.pdf [pdf 32 KB] |