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Disgruntled litigant asks Employment Court for name suppression after a win in the Employment Relations Authority

16 Jun 2023

| Author: Jenni McManus

A restaurant employee who won a breach of confidentiality claim against his former boss is asking the Employment Court for permanent name suppression.

The worker, who is identified in court documents only as MW, lost his bid for secrecy when the case came before the Employment Relations Authority (ERA). Member Marija Urlich found MW’s former employer had breached the terms of a settlement agreed between them after his employment came to an end, which included confidentiality and non-disparagement clauses, but refused to suppress his name.

“On his own evidence, ‘the horse has bolted’,” Urlich said. “People in the industry know he had an employment relationship problem with [the employer] which was resolved by way of a mediated record of settlement. “A non-publication order is unlikely to cure the effect of information already publicly known. In addition, [MW’s] concern about the potential negative impact of publication is not strong and insufficient to support a non-publication order.” But MW says the ERA erred and that the protection granted by the confidentiality clause in his settlement agreement would be defeated unless he had name suppression.

In the meantime, Employment Court Chief Judge Christina Inglis has made an interim order suppressing both the worker’s name and any identifying details. Because of the presumption of open justice, plaintiff suppression orders are rare in the employment jurisdiction. Given the importance and breadth of the issue, the chief judge has also decided to convene a full bench of the court to determine the matter, which is likely to extend further than the specific issues covered in MW’s settlement, agreed under s 149 of the Employment Relations Act 2000.

While the defendant company isn’t included in Chief Judge Inglis’ order, LawNews has chosen not to publish its name. The defendant is a small suburban restaurant and those working in the hospitality sector would likely have little difficulty in identifying the plaintiff if the name of the business were revealed. The defendant company is also taking no part in the name suppression appeal. After being ordered to pay a penalty of $1000 for its breach (with $500 going to MW), the restaurant says it does not want to take an active part in MW’s challenge.

Employment problem 

The saga began with an employment problem (the ERA’s determination makes no mention of the details) that culminated in a settlement between the worker and the company, certified by a mediator in November 2021. Subsequently, MW said the company breached both the confidentiality and non-disparagement clauses in the agreement. He filed proceedings with the ERA, seeking a compliance order, penalties for the alleged breaches and costs.

At the ERA hearing, MW contended that the breaches appeared to have occurred in a post settlement phone conversation between one of the company’s directors and her father. The director, who had signed the settlement agreement on behalf of the company, was accused of leaking specific details about the agreement – an allegation she and her father denied, saying they spoke only in general terms of her relief that the dispute was over.

Early in February 2022, MW said he was contacted by an Auckland business owner who said he’d been warned about MW during a conversation with a third party about “money and employment”. MW said he had spoken to nobody about the terms of the settlement, meaning the information could have come only from the defendant company.

The ERA found that specific information about the settlement agreement was communicated during the phone conversation between the director and her father. Further, it found that the father had made disparaging remarks to others about MW but as the father was not a party to the settlement agreement, he had not breached the terms of that agreement. But the situation was different for the director. She had signed the record of settlement on behalf of the business and as the business had been given the opportunity to take independent legal advice about the agreement’s meaning and terms, “it must be taken to have been aware of its obligations under the record of settlement,” the ERA said.

“There is no basis on which I can reasonably conclude that the breach of the record of settlement by [the company] was inadvertent, minor or technical…. What was communicated was specific information about what arose during the course of the mediation and could not be readily inferred from the general circumstances, particularly given on her own evidence [the director] was confident going into the mediation that [the company] had done nothing wrong in respect of obligations owed to [MW] under the employment agreement.”

The Employment Court is likely to hear the name suppression matter later this year. ADLS has been approved as an intervener, along with the NZ Council of Trade Unions, NZLS, the NZ Bar Association, the Employment Law Institute and the Privacy Commissioner. Others are expected, including applications from media and employer organisations.

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