Authority avoids clobbering a startup
$9,814 is the amount the Employment Relations Authority ordered a Christchurch couple to pay Mrs Turner’s previous employer Staged2Sell Ltd for taking a few liberties when setting up shop in the Real Estate industry. It’s a modest amount that strikes a balance between encouraging competition in the market, and allowing employers some protection with regard to commercially sensitive information.
The breakdown is:
Painful, but probably not devastating. Mrs Turner was found by Antoinette Baker, Member of the Employment Relations Authority, to have breached the non-solicitation clause in her employment agreement during her employment with Staged2Sell Ltd, and being involved in a conflict of interest.
It’s worth noting that there was no restraint of trade dispute to speak of – these don’t go down well in the Real Estate industry because they are deemed anti-competitive. The Commerce Commission, the competition watchdog, is known to monitor the Real Estate industry for anticompetitive conduct generally.
Injunction, damages, penalties, costs
Back in December 2023 the Authority granted a restraint of trade injunction for a company called Cookright Filtering Service Ltd. Cookright went on to apply for damages, penalties, and costs, and was awarded a total of $36,424 against its former employee and his partner who was also his new employer. That was manifestly excessive because the former employee was only earning a couple of dollars above minimum wage.
Fortunately the Employment Court overturned it by consent.
Noncompetes are only moderately enforceable in New Zealand, but where they are enforced we believe that the Cookright matter has informed a more measured approach to resolving such disputes, as we see in the Staged2Sell matter.
Tristam Price, Editor
Comments