The Fair Work Commission has upheld the dismissal of an employee who attempted to solicit his employer’s clients via LinkedIn during his employment. The case is a useful reminder that employees have a fundamental obligation to act in the best interests of their employer.
The fateful email
Mr Pedley had been employed by PVH as a Senior Interior Designer for just under 2 years. During his employment, he had carried out private interior design work on his own behalf in addition to his work for his employer. PVH was aware of this, and allowed it to occur.
In January 2013, Mr Pedley sent a group email via LinkedIn to a number of recipients, including certain clients of PVH. The email indicated that Mr Pedley was looking to expand his personal interior design company into a full-time operation, and sought their support in doing so. It also stated that he would take on jobs of any size, and that:
One of the many benefits of working with a new company are (sic) that you get the operator’s prior big business experience at small business rates!
Later that day, PVH became aware of the email via a ‘concerned client’. Early the next morning, PVH summarily terminated Mr Pedley’s employment due to what it considered to be a serious breach of his contract of employment. Amongst other things, the contract included a clause which prohibited Mr Pedley from competing with PVH during his employment.
Decision to dismiss upheld
Mr Pedley subsequently brought an unfair dismissal claim, arguing that there was no valid reason for his dismissal, as his intention was to canvass small pieces of work which were of no interest to PVH.
The Commission upheld PVH’s decision to terminate Mr Pedley’s employment, and held that by sending the email, Mr Pedley had breached his fundamental employment obligations to PVH. In particular, by deliberately acting to solicit work from current clients of the company, Mr Pedley acted in clear breach of his obligation to put the interests of his employer before his own. His conduct was inconsistent with the continuation of his contract of employment and amounted to serious misconduct.
The Commission held that Mr Pedley had been informed of the reason for his termination, but agreed that he had not been given much of an opportunity to respond to PVH’s concerns. However, this was countered by the fact that Mr Pedley did not deny sending the email and the terms of the email were clear. Further, the directors of the company believed that nothing he could say would change their minds, and considered the most effective way to limit any damage to the company was to put an immediate end to his employment. The Commission also held that any explanation Mr Pedley may have proffered for sending the email would have been unlikely to change the directors’ minds.
The Commission also rejected Mr Pedley’s argument that by allowing him to work on small private jobs outside of work, PVH had waived any right to prevent him from soliciting clients during his employment. The Commission made clear that the obligation not to solicit clients during employment ‘goes without saying’, regardless of the absence of a clear express clause to this effect.
Implications for employers
Employers are entitled to take seriously any attempt by their employees to solicit clients. However, employers should also take care when permitting employees to carry out work on their own behalf in addition to their employment, and make clear the terms on which this is permitted to occur. Whilst the employer in this case was not found to have waived its right to prevent the employee from soliciting, this issue would be assessed on a case by case basis.
This article was written by Lauren Barel, Director and Principal of Workdynamic Australia. The information in this article is for information purposes only and does not constitute legal advice. You should obtain specific advice relevant to your circumstances.