JSE-listed electronics company Reunert says a High Court order stops former ECN Telecommunications CEO John Holdsworth from hiring any of its current or former staff, until a full hearing is held towards the end of May.
Holdsworth and Reunert are embroiled in a restraint of trade wrangle, as Reunert accuses Holdsworth, founder of the company Reunert bought last year, of poaching its staff and intellectual property to start mobile company AppChat.
The JSE-listed company says Holdsworth breached a termination agreement and his contract of employment by establishing the new telecoms company. AppChat is set to launch in October and aims to cut on-net calls by as much as 80%.
Reunert filed papers on 25 March in the North Gauteng High Court to stop Holdsworth from launching AppChat. It argued that Holdsworth aimed to launch a product that would compete head-on with Nashua ECN in a bid to undermine the Reunert subsidiary.
Temporary relief
Yesterday, the North Gauteng High Court ruled that Holdsworth and AppChat are prohibited from employing any of the employees or former employees of Reunert until a hearing is held towards the end of May, says Reunert in a statement.
Reunert says Holdsworth was also told to adhere to the restraint of trade agreement.
The listed company bought ECN last year in a bid to drive convergence across its Nashua business units. In July, Holdsworth stepped down as CEO, a month after Reunert's R171.9 million bid to buy it went through.
However, Holdsworth says the court did not rule on the restraint, and that it is “business as usual” until the hearing on 29 May. He says the only impact is on the employees, but this is only a “two-week holding pattern” as most staff's resignation periods come to an end in the middle of May.
Holdsworth and AppChat were successful in opposing the “extensive” relief sought by Reunert, he says. The hearing has been postponed to the end of next month, which will enable Holdsworth and AppChat to file affidavits and place their version before the court, after which a full hearing can take place.
Holdsworth says some limited relief was granted to Reunert pending the hearing and no finding has yet been made. Holdsworth's responding affidavit is set to be filed by 24 April and then Reunert has until 8 May to lodge its response to his affidavit.
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