Case proves restraint of trade sometimes enforceable

• Published date: 31 January 2022
• Publication title: Otago Daily Times: Web Edition Articles (New Zealand)

Discovery's predecessor was MediaWorks TV which produced shows such as Newshub and The AM Show

Ms O'Brien's employment agreement with Discovery included a restraint of trade provision, preventing her from working in any business or activity in competition with MediaWorks for a period of three months.

Ms O'Brien contested the restraint of trade. Settlement negotiations were unsuccessful and she then applied to the Employment Relations Authority for a determination that the restraint of trade was unenforceable.

The Authority disagreed and ordered that she comply with the restraint of trade for a reduced period. The original three-month restraint of trade was reduced by five weeks to allow for annual leave taken and the adjournment of Parliament on December 19, 2021. This means she cannot start her employment with MediaWorks Radio until March 14.

The starting point when looking at any restraint of trade is that they are contrary to public law and not enforceable. That is because they are anti-competitive. To overcome this, Discovery had to establish it had a legitimate proprietary interest to protect...