‘But they asked me to’ is no excuse

Cases

‘But they asked me to’ is no excuse

A recent NSW Court of Appeal judgment has upheld the operation of a restraint of trade provision in a contract of employment which provided that the employee would not ‘…canvass, solicit, interfere with or entice away’ any client of the employer (for a period of four months following the termination of the contract) in a situation where the former employee was approached by the client.

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A recent NSW Court of Appeal judgment has upheld the operation of a restraint of trade provision in a contract of employment which provided that the employee would not ‘…canvass, solicit, interfere with or entice away’ any client of the employer (for a period of four months following the termination of the contract) in a situation where the former employee was approached by the client.

In Barrett and Ors v Ecco Personnel Pty Ltd Matter No CA 40586/96 [1998] NSWSC 545] the Court (Sheller and Stein JJA, and Fitzgerald AJA) unanimously rejected the submission that ‘solicit’ should be construed in a highly mechanistic fashion, that is, by asking ‘who made the first approach?’ The Court stated:

"This cannot be correct. One may acknowledge that in most instances the first approach will be made by the ex-employee to the former customer. Common sense however demands that this is not the exclusive means by which a solicitation may occur.

...‘solicit’ …in its simplified form meant ‘to ask’. Its other meanings included ‘to call for’, ‘to make request’, ‘to petition’, ‘to entreat’, to persuade’. …I cannot see that to propose to do business ceases to be soliciting business simply because the recipient invited the proposal."

The matter arose when, a few days following termination from Ecco, the former employee was approached by Nestle, a client of Ecco, to put a proposal to be Nestle’s industrial consultant. The proposal succeeded. Key to the appeal, the Court at first instance (Young J) found that the former employee had gained Nestle’s business on the basis of the proposal that he put.

 

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