Thinking of snatching the top talent from your
competitors? Make sure to put some money aside to pay for the
fight, including your competitor's lawyers.
In a recent Supreme Court of NSW decision, despite not being a
party to the proceedings, Talent2 got stuck with HRX's legal
bill after HRX successfully enforced its post employment restraints
against a former employee, Stuart Scott, stopping him from working
As is often the case in restraint matters, the poacher, Talent2,
funded Mr Scott's defence when HRX decided it wouldn't sit
idly by while its former employee not only took up employment with
one of its top competitors in breach of his contractual restraints,
but took HRX's confidential information with him.
Although the Court's power to order costs against a
non-party is used sparingly, in this case the Court found that,
without Talent2 footing Mr Scott's legal bills, the litigation
would not have been necessary.
The Court didn't have much sympathy for Talent2's excuse
that it didn't appreciate the extent of Mr Scott's breaches
and once it discovered that Mr Scott unlawfully took HRX's
confidential information, it pulled its support (including forcing
Mr Scott to resign). The Court said that it is the responsibility
of the poaching employer to do its homework and ensure that its new
recruit is not breaching any restraint obligations.
Finding that Talent2 had much to gain if Mr Scott successfully
defended the case brought against him, the Court did not have
difficulty in ordering Talent2 to pay HRX's legal costs.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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