A restraint-of-trade clause in the contracts of shop assistants at Masterton Pak 'N Save has employment lawyers baffled and union delegates outraged. The three-month clause, which is most often used by employers to protect trade secrets, stops employees working for rival stores after they leave the supermarket.
The Dominion Post was provided with a copy of a contract for a Masterton Pak 'N Save shop assistant which says the person cannot work for a rival or similar store within a 50-kilometre radius for three months after resigning.
Employment lawyer Peter Cullen said the clause was far-reaching and it would be hard to prove it was justified in the case of shop assistants. "I've never heard of a check-out operator being subject to a restraint of trade." It potentially stopped former staff working at vegetable stores, bottle shops and similar outlets.
But Masterton Pak 'N Save franchise owner Paul de Lara-Bell stood by the contract. "You can put whatever you want in a contract. Whether you can uphold it in a court of law, and whether people agree to it, are two different things." He said the clause was mainly aimed at senior staff, but the supermarket would not rule out using it on others.
National Distribution Union secretary Laila Harre said the clause was completely unreasonable and illegal. "People don't know what their rights are. They are fearful of breaching the contract and the clause keeps them in a job they're not happy with." She said supermarket workers aged 15 and under usually earned about $6 an hour. Youth workers, aged 16 and 17, were paid $9 an hour, while those over 18 years earned the minimum wage of $11.25 an hour.
Susan Hornsby-Geluk, a partner with law firm Kensington Swan, said the courts scrutinised such clauses heavily, with the onus on employers to prove former staff had specialist knowledge. "You'd be stretching it to say a packer of groceries has either client relationships or special knowledge that create a risk for the employer."
News of the clause has prompted Foodstuffs, which owns Pak 'N Save, to step in. Wellington region group manager Robert Kent said the clause was specific to the Masterton site only. The company did not believe it was enforceable. "We need to take the steps to remove it from that particular site's employment agreement."
In March last year Wellington barista Victor Hsieh was stopped by the Court of Appeal from competing near any of Fuel Espresso's coffee outlets after he took the lease of a coffee cart, Beangrinder, a week after leaving Fuel Espresso. He had a restraint-of-trade clause that stopped him making coffee within 100 metres of any Wellington Fuel outlet for three months after leaving. But Ms Hornsby-Geluk said a barista was skilled and had stronger client relationships.
