| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Christchurch |
| Reference No | [2011] NZERA Christchurch 196 |
| Hearing date | 1 Dec 2011 |
| Determination date | 09 December 2011 |
| Member | M B Loftus |
| Representation | P Sawrbrick ; P Macdonald |
| Location | Nelson |
| Parties | Turners & Growers Ltd v Wagner and Anor |
| Other Parties | Market Gardeners Ltd |
| Summary | RESTRAINT OF TRADE – Applicant sought to enforce restraint of trade provision against first respondent (“W”) – Applicant claimed W required to have intimate knowledge of applicant’s business, customers, buying patterns, suppliers, pricing and business practices – Applicant claimed developing and maintaining customer relationships critical to business and therefore worthy of protection – Respondents claimed development of relationships intrinsic tool of trade, part of job and not indicative of any proprietary interest – Respondents claimed only two significant industry players in region – Respondents claimed all buyers and sellers were clients of both and extent of daily activity determined primarily by price – Respondents claimed W not party to any trade secret or commercial sensitivities and given effect of price, W should be able to offer skills without restriction – Applicant claimed intricacies differentiated approach to second respondent’s (“M”) – M accepted had previously engaged staff directly from applicant on basis would not start employment until expiry of restraint but would be paid during ensuing period – Authority found such arrangements indicated possibility of interests worth protecting – Found fact W sought legal advice regarding resignation indicated knowledge of potential issues and applicant likely to consider interest worth protecting – Found duration of restraint reasonable – Found no evidence as to whether geographical restriction on employment appropriate – Found restriction on local region reasonable – Found arguable case – Found applicant more than capable of making good any loss W likely to suffer – W claimed significant personal commitments and limited financial means – Applicant claimed loss potentially significant – Found if price significant determinant of client behaviour, quantification of damage might prove virtually impossible – Found easy to recompense W for loss suffered – Found balance of convenience favoured applicant – Found applicant feared potential encroachment on client base as result of W acting in breach of employment agreement (“EA”) with applicant – Found contended breach was commencement of employment with M – Found commencement of employment imminent – Found overall justice favoured granting relief – Found W must comply with terms of EA – Found subclauses amended so W could not solicit clients who were not already clients of M and could not work in local region for period of restraint – Found M to cease any activity which might aid and abet breach of W’s EA – Found M able to employ W – Sales Specialist |
| Result | Application granted ; Costs reserved |
| Main Category | Restraint of Trade |
| Cases Cited | Airgas Compressor Specialist Ltd v Bryant [1998] 2 ERNZ 42;Gallagher Group Ltd v Walley [1999] ERNZ 490;Kumar v Elizabeth Memorial Home Ltd [1998] 2 ERNZ 61 |
| Number of Pages | 11 |
| PDF File Link: | 2011_NZERA_Christchurch_196.pdf [pdf 52 KB] |