Non-compete clause not ‘fair’: Court dismisses injunctions against ex-MoneySmart employee who joined rival

Non-compete clause not 'fair': Court dismisses injunctions against ex-MoneySmart employee who joined rival

ANSWERS FROM BOTH Factors

Due to its limited scope of activity, geographic area, and time, MoneySmart claimed that its non-compete clause protected reasonable proprietary interests and was fair.  

The business claimed that it had acquired Mr. Musienko’s knowledge in the banking sector through training, claiming that he had no prior work experience in the financial sector.  

MoneySmart also asserted that the non-compete section just limits participation in online financial product comparison service, a marketplace dominated by MoneySmart and Money Hero, as part of its reasoning. Collectively, they held 95 per cent of the business promote in 2022.  

When Mr. Musienko began working with CAG Regional Singapore, MoneySmart claimed that he broke his duty under the work deal.

He countered, however, that the non-compete clause was very broad and thus illegal and that it did not safeguard any legitimate proprietary interests.

He claimed that the non-compete section, which forbids his use of online financial product comparison websites, was “plainly ridiculous.” That’s actually though he was not employed in that aspect of the business, and that he was only involved with Bubblegum.  

He claimed that MoneySmart had not demonstrated that he had accessed personal information or that the confidentiality clause had been or is likely to be violated.  

He also claimed that the time prohibitions should be overturned because MoneySmart had not made “full and frank disclosure,” including by mischaracterizing his work history before he joined the company.  

MoneySmart failed to reveal the “acrimonious conditions” under which he had resigned- especially that he was essentially asked to retire, said Mr Musienko.  

JUDGE’S Choice

The judge determined that MoneySmart did not demonstrate that a non-compete clause can safeguard genuine specialized interests.  

Justice Tan claimed that he could n’t accept MoneySmart’s training in the” special field” of the digital insurance sector, which would have sown the expertise of Mr. Musienko, to the point where it can be said that it had invested a lot of time and resources in his training.  

Before being hired, he made it clear that Mr. Musienko had the relevant experience in both the tech and the banking sectors.  

Justice Tan and Mr. Musienko both agreed that the reach of the non-compete provision was far too broad.

There is, at best, a very tenuous connection between the prohibition against engaging in any business that offers online financial product comparison services and Mr. Musienko’s work while employed by ( MoneySmart ), much less a close relationship.  

” This is because ( Mr Musienko’s ) employment primarily concerned Bubblegum and digital insurance-related matters, rather than MoneySmart’s provision of online financial product comparison services. “

Additionally, the judge determined that the geographic reach of the non-compete section was excessive. He noted that Mr Musienko’s job with Bubblegum offered items to only  Singapore people, and did not involve other nations.  

The prosecutor noted that the clause had been written in a” cascading way,” which might lead to the court reaching the “longest acceptable restraint time.” This was harsh towards Mr Musienko, Justice Tan noted.  

” Ergo, for these reasons, the non-compete section cannot be said to be fair as between the parties or in the interests of the public,” he said.

Additionally, the judge was not certain whether the data Mr. Musienko had access to was private.  

Much of the information was now shared formally, such as MoneySmart’s economic benefits and business plans on information sites. Additionally, MoneySmart did not attribute the details as private, and it even shared it with employees who lacked the necessary information for their jobs.  

Mr. Musienko, he continued, used the information that was given to him to create the Bubblegum program.  

” Thus, ( MoneySmart ) has failed to establish that there is a good arguable case that the alleged information was confidential and that ( Mr Musienko ) has breached, or will breach, the confidentiality clause. “