Three employees have been ordered to pay over $4 million in damages following an Employment Court hearing into their conduct. 

The Court found that they had (while still employed):

  • Solicited other staff to join them at a new company;
  • Solicited customers of their employer;
  • Removed confidential information;
  • Obtained client lists;
  • Used quotes of their employer to undercut for their new business; and
  • Prepared quotes for the new business while still working in their employment.

These actions significantly affected the business of their employer to the tune of over $4 million.

The new company they set up had its machinery all organized and staff in place ready to go the moment they resigned. 

Unfortunately for the three the new company has gone into liquidation.  No doubt their former employer will now begin seeking to recover the damages awarded from them personally.

The employment relationship is not a one-way street. Employees do owe duties to their employer (as well as the other way around).  It is great to see a Court taking a tough line on enforcement when the employee’s behavior is in breach.

Note that the breaches by the employees were not breaches of any restraint of trade.  These breaches of the basic obligations of an employee occurred while they were still employed.

For assistance with any employment challenge please call Alan Knowsley.