Her phone number on the rival's website was just the start
She helped her husband launch a rival business while still on the payroll. It cost her $5,000.
A New Zealand home-staging company has won penalties against a former employee who helped set up a competing business during her employment - but walked away empty-handed on its bigger claims of theft and confidentiality breaches.
The Employment Relations Authority's determination, issued on October 1, 2026, found the worker breached her employment agreement's conflict of interest and non-solicitation clauses and the basic loyalty she owed her employer as an employee.
The penalties totalled $5,000. The employer's claims that the worker had taken staging property and accessed confidential information were dismissed for lack of evidence.
How the competing business took shape
The worker had progressed from casual van work to a senior operations role at Staged2Sell, a Christchurch-based company that stages furniture and accessories in houses being marketed for sale. Her husband had also worked there as a furniture remover and driver before resigning in late March 2024.
Things moved fast after that. A website for a new staging business - Stage It Collective - went live on March 30, 2024, just two days after the husband's resignation. A Facebook page appeared around the same time. Hard-copy flyers were handed around. The worker's phone number was listed on the website.
She told the Authority she did not know her number was there. The Authority found that implausible.
The worker was still employed at Staged2Sell throughout. By late May 2024, she had been promoted to customer relations manager with a $4-per-hour pay rise and a new 35-page employment agreement containing conflict of interest, non-solicitation, and restraint of trade clauses.
She initialled every page.
The phone call that didn't settle things
Both the worker and her husband said they understood the company's managing director had given permission for the competing business during a phone call on June 8, 2024. The managing director denied it. The Authority accepted her version, noting the call came months after advertising had already begun - a timeline that suggested the worker was, in the Authority's words, "somewhat willfully blind as to what was happening."
Ten days after that phone call, Stage It Collective was formally incorporated. The worker signed on as a shareholder; her husband became a director.
The real estate agents who switched
The Authority found the worker breached her non-solicitation obligations during her employment. At least two real estate agents who had regularly referred staging work to Staged2Sell were solicited or diverted to the new business. One agent cancelled a booking with Staged2Sell and rebooked with the competitor for two separate jobs.
Given the worker's senior role - she took and scheduled bookings, and dealt directly with the agents referring work - the Authority found it "inconceivable" she did not know which agents were regular referrers.
One day of paid leave, spent staging for the rival
The worker did not dispute that she spent a day of paid leave helping her husband stage a house for the competing business. He had started a new job, ran out of time to finish the work, and called her in. She found a babysitter and completed the staging - bedrooms and finishing touches she was "well versed in" from her day job.
The Authority found this breached the basic loyalty an employee owes their employer. It was, in the determination's words, "difficult to understand how she could not have realised the problem."
What the employer didn't prove
The bigger-ticket claims fell away. The employer alleged the worker had taken staging items - picture frames, vases, a cushion - identified by the managing director from the competitor's advertising photos. The items were described as things that were "impossible to purchase or they are very difficult to obtain." The total value claimed for the items the worker acknowledged taking was $260, and the Authority noted their likely value was less given they were second-hand and purchased mostly some years before.
The Authority found the evidence insufficient. Identifying items from photos and asserting they could not have been bought elsewhere did not meet the bar for what the determination called "a serious claim." The worker's explanation - that she believed the items were being given away - had "some plausibility."
The confidentiality claim also fell short. The employer argued the worker must have downloaded information from its cloud storage because access logs showed unusual activity and only a handful of people had access. The Authority called this "a stretch" and declined to make "a presumptive leap" without evidence of what was actually accessed or used.
No financial compensation was ordered for lost business. The employer presented a spreadsheet claiming $15,870 in losses but accepted under questioning that the figures represented what it would have charged clients, not what its actual profit would have been - and much of the spreadsheet related to the dismissed theft claims rather than the proven solicitation breaches.
The penalties and what softened them
The Authority ordered a $4,000 penalty for the non-solicitation breach and $1,000 for the breach of the worker's duty of loyalty, both payable to Staged2Sell under s 134 of the Employment Relations Act 2000.
Several factors softened the outcome. After resigning, the worker removed herself as a shareholder of the competing company, and the business ceased trading for three months - the length of the restraint of trade period in her agreement. The Authority accepted she had "sought to genuinely 'make amends'" and found her "partly caught 'in the middle'" of her husband's lead in establishing the business.
No penalty was ordered against Stage It Collective itself. The Authority found the connection too weak given the short timeline between incorporation and discovery, and the three-month trading pause that followed.
Costs were reserved.
For HR teams reviewing their restraint of trade and non-solicitation clauses, the case is a practical illustration: those clauses held up, but the employer's bigger claims around theft and confidentiality failed because the evidence did not go beyond assumption.
