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An on-going legal battle between two staffing companies in Australia, HRX and Talent2, has reached a temporary conclusion today as the New South Wales Supreme Court today awarded costs in HRX's favour.
HRX is an Australian staffing firm which stands in direct competition to Talent2, one of the largest HR BPO organisations in the Asia Pacific region. The two companies had been involved in a lengthy legal battle after Talent2 hired an ex-employee from HRX.
The former HRX employee who was later recruited by Talent2, Stuart Scott, worked at HRX until January 2012. His contract of employment contained post-employment restraints preventing him from soliciting HRX's clients and from working in a competitor's business for a particular period.
He then took up a job at Talent2 during the restraint period. When HRX found out about this last year, the firm demanded that Mr Stuart stop soliciting HRX's clients and cease working for Talent2.
HRX incurred substantial costs in prosecuting its case, including seeking interlocutory orders. In August 2012, Talent2 then informed Mr Stuart it would no longer support him in his defence. Talent2 asked him to resign, which he did, with HRX requesting the firm to cover legal costs.
The judgement today read: “HRX seeks an order pursuant to s 98 of the Civil Procedure Act 2005 that Talent2 pay HRX's costs of the proceedings. HRX contends that it has been successful in the proceedings and that Talent2 was the active party behind the defendant's [Mr Stuart] unsuccessful defence of the proceedings.”
The judge ruled in favour of HRX, saying “it is incumbent upon employers who effectively poach their competitors' employees to ensure that those employees are not acting in breach of their obligations to their former employers, particularly where the consequence of such breach is a benefit to the new employer.
“Talent2 is to pay HRX's costs of the proceedings, including its costs of this application,” the judge ordered.
According to his LinkedIn profile, Mr Scott now works as a Principal Consultant for the Chandler Macleod Group, the third largest staffing firm in Australia, having taken up employment there in October 2012, one month after his departure from Talent2.