Posted on: Dec 16, 2013

A penalty of $50,000 payable to the employer has been imposed on an employee who breached his employment agreement with the employer at least 263 times.

The Employment Relations Authority held that the employee was bound by a reasonable restraint of trade and by confidentiality provisions and had breached them by:

• copying, removing and using the employer’s confidential information and intellectual property for his own     benefit
• using the employer’s confidential information and intellectual property for the benefit of one of the     employer’s competitors
• failing to disclose an association with a competitor and work done for the competitor while employed
• setting up and running his own websites in competition with the employer while employed
• soliciting employees to leave their employment with the employer
• soliciting customers of the employer and retaining customers’ business cards when his employment     terminated, and
• starting to work for a competitor and continuing to do so (knowingly) in breach of the restraint of trade.

The Authority said because the employer had been caused serious harm and the breaches were flagrant, deliberate and ongoing, a severe penalty should be imposed. It said denunciation and deterrence were important. The Authority noted that not all of the damage the employer had sustained would be recoverable. The Authority also awarded $6,778.17 to the employer to reimburse it for the costs it incurred in engaging a private investigator to investigate the employee’s activities.

See Zeald New Zealand Ltd v Bernard [2013] NZERA Auckland 402.

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