He later renamed the customer list file "Mum's recipe - Meat Loaf" to conceal it
No written contract, no restraint clause, no confidentiality agreement — and a departing manager who took the customer list on his way out.
That is the scenario at the heart of a recent New South Wales Supreme Court decision that should give every HR professional pause, particularly those working with small and medium-sized employers where paperwork often takes a back seat to getting the job done.
In Direct Flow Pty Ltd t/as Arthur Rubber v Petersen [2026] NSWSC 171, decided on 11 March 2026, Justice Richmond ruled that a former retail manager breached his equitable duty of confidence and his fiduciary duties to his employer after spending over a decade on the job without ever signing a written employment contract.
Andrew Petersen managed a rubber products retail business in Wagga Wagga from 2006 until he resigned in December 2017. During the 18 months before he left, the Court found he had been quietly laying the groundwork for a competing business. He registered his employer's trading name under his own ABN, built a new product catalogue and website using the company's brand, and downloaded a 50-page customer list with details of 1,841 clients from the business's MYOB system. He then opened his own shop, Maxx Rubber, around the corner.
When the employer's lawyers wrote to him in January 2018 asking him to return any confidential information, Petersen denied having any. He had kept the customer list. Years later, he renamed the file on his computer to "Mum's recipe - Meat Loaf." The Court found this was an attempt to conceal it.
Justice Richmond held that the customer list was confidential information, that Petersen downloaded it intending to use it for his new business, and that his conduct amounted to using his employer's assets as a "springboard" to get his competing venture off the ground.
There was also a dispute over who owned the product catalogue, which Petersen had largely put together at home in his own time. The Court applied section 35(6) of the Copyright Act 1968 and found that because the catalogue was created as part of his duties as sales and marketing manager, copyright belonged to the employer — regardless of where or when the work was done.
Despite winning the case, the employer walked away with just $50,000 in equitable compensation. The Court applied a 50 percent discount, recognising that other factors may have contributed to the business's downturn and that Petersen, without any contractual restraint, was entitled to compete once he left.
And that is the real lesson here. The employer had no written contract to fall back on. No confidentiality clause. No IP assignment. No post-employment restraint. It was forced to rely entirely on equitable principles — a route that took years to resolve, with proceedings filed in 2022 and judgment not delivered until 2026.
For HR professionals, the takeaway is straightforward. Written employment contracts with clear provisions around confidentiality, intellectual property, and post-employment competition are not a nice-to-have. They are the baseline. The same goes for offboarding procedures — revoking system access, auditing downloads, and recovering company property before a departing employee walks out the door. This case is a reminder of what can go wrong when those basics are missing.
