| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Christchurch |
| Reference No | [2011] NZERA Christchurch 129 |
| Hearing date | 12 Aug 2011 |
| Determination date | 30 August 2011 |
| Member | H Doyle |
| Representation | S Boyce ; S Bowen (in person) |
| Location | Nelson |
| Parties | Guthrie t/a You Hair Salon v Bowen |
| Summary | RESTRAINT OF TRADE - Applicant claimed respondent breached employment agreement’s competition and confidentiality clauses – Respondent claimed no enforceable agreement between parties and did not have applicant’s confidential property - Parties agreed both employment problems could be heard at same investigation meeting but respondent’s arrears of wages and holiday pay claim resolved at mediation – Applicant sought order that respondent cease contacting applicant’s clients - Respondent proposed would work for applicant as ‘rent a chair operator’ – Applicant explained not offering that type of employment – No written employment agreement provided until two months after employment commenced – Respondent claimed wanted to leave salon when given copy of agreement as preferred to work as ‘rent a chair operator’ but felt obliged to stay – Respondent told applicant would look at agreement but failed to do so – Applicant claimed over next month asked respondent three times about agreement – Respondent told applicant month later would not be signing agreement and looking for work elsewhere – Authority found respondent did not agree to terms and conditions in written employment agreement and had no intention of signing – Found unsigned agreement unenforceable and therefore respondent did not breach agreement - Parties discussed notice period and agreed respondent would leave next week – Applicant raised concerns day before respondent’s end date about respondent telling client would be working for new salon – Respondent claimed only answered client’s question about future plans – Respondent claimed upset ‘last day’ recorded in appointment book day before agreed end date – Respondent left salon later that day and did not return - Found ‘last day’ entry mistakenly recorded as day before and respondent did not raise concern with applicant before leaving – Found respondent’s discussion with client not likely to damage applicant’s business and no evidence client decided to go to respondent’s new salon after conversation – Found respondent did not breach duty of fidelity on last day of employment - Respondent started work as ‘rent a chair operator’ in same area as applicant’s salon – Applicant claimed advised by several clients including some who did not have listed numbers had been contacted by respondent in attempt to solicit business - Respondent denied had confidential list of applicant’s clients and telephone numbers – Client (“M”) claimed received call from respondent after respondent’s employment with applicant ended and was told respondent working at another salon with cheaper services – M claimed respondent had M’s name wrong and as M’s number not listed assumed respondent had taken details from applicant’s records – Respondent claimed when called M must have intended to call back someone else and was why had wrong name - Found very unlikely respondent would accidentally call M instead of someone else, not establish had called wrong number and very coincidental M also applicant’s client - Client (“Z”) claimed had received answer phone message from respondent but cut short so only heard respondent give introduction – Z claimed had never given phone number to respondent – Client (“T”) claimed also received phone call from respondent and number not listed – Respondent claimed T gave number as T’s sister training to be beautician and respondent could get waxing done in exchange for free hair services – T denied gave respondent number but agreed gave respondent number for T’s sister – Found more likely than not respondent did breach confidentiality by taking at least two client numbers – Authority gave respondent option to either return any client information in possession or formally advise did not have any client information and would not use any client information for respondent’s own business – Leave reserved on further orders – PENALTY – Applicant sought penalty against respondent for breach of good faith and confidentiality – Found no evidence breach by respondent caused any loss of applicant’s clients – No penalty - RECOVERY OF MONIES – Applicant sought reimbursement for costs incurred advertising respondent’s employment and haircuts for respondent’s family and friends – Respondent denied agreed when commenced employment would pay half of advertisement costs – Applicant did not request payment until after advertising bill due date and no reference to advertising costs in proposed agreement – Found respondent did not agree to pay advertising costs – Authority accepted applicant’s policy was that staff would pay for haircuts for family and friends – Respondent to pay applicant $70 reimbursement for haircuts - Senior Hair Stylist |
| Result | Application granted (recovery of monies)($70) ; Applications dismissed (restraint of trade) (penalty) ; Costs reserved |
| Main Category | Restraint of Trade |
| Statutes | ERA s4A(a);ERA s134;ERA s157 |
| Cases Cited | Peninsular Real Estate Ltd v Harris [1992] 2 NZLR 216;Tisco Ltd v Communication & Energy Workers Union [1993] 2 ERNZ 779 |
| Number of Pages | 10 |
| PDF File Link: | 2011_NZERA_Christchurch_129.pdf [pdf 34 KB] |