Mr Petersen worked for Arthur Rubber for almost 12 years. Photo: Arthur Rubber Facebook.
A Wagga manager who renamed a confidential customer list “Mum’s recipe – Meat Loaf” has been ordered to pay $50,000 after a court found he secretly set up a rival business while still working for his employer.
Andrew Petersen was employed as a manager at the Wagga rubber supply business Arthur Rubber between 2006 and 2017.
According to a published Supreme Court decision, Mr Petersen registered a business called Maxx Rubber shortly before resigning. He also downloaded Arthur Rubber’s customer list onto his home desktop computer and transferred it to his laptop, later renaming the document “Mum’s recipe – Meat Loaf”.
In 2018, he launched Maxx Rubber from home before opening a premises in Wagga, close to Arthur Rubber.
Mr Petersen went on to sell products to some of his former employer’s customers, including people listed in the customer database he had taken.
Arthur Rubber later took him to court, alleging he had secretly used his position to prepare the new venture while still employed and had taken confidential information to gain an unfair head start.
The company said he copied a customer list he was not allowed to take and contacted at least two people on it.
Mr Petersen accepted that customer lists were generally considered confidential but argued there was no proof he had actually misused the information. He said he downloaded the list for legitimate work purposes before resigning.
The court accepted that customer lists in a specialised industrial supply business could be valuable confidential information, as they revealed regular clients and key contacts.
Justice Mark Richmond said Mr Petersen’s conduct went beyond simply preparing to compete after leaving his job. While employees are allowed to plan a future business, they cannot use confidential information or their position to gain an unfair advantage.
The judge found Mr Petersen breached both his duty of confidence and his duty to act in his employer’s best interest by taking the customer list and carrying out preparatory work for his new business while still employed.
Arthur Rubber sought significant compensation, arguing it lost business after Maxx Rubber began operating, with some customers shifting their orders.
However, Justice Richmond said there was not enough evidence to attribute all of those losses directly to Mr Petersen’s wrongdoing. He noted that, given Mr Petersen’s experience, he could have built a competing business within about 12 months even without using confidential information.
Instead, the court found Mr Petersen gained an unfair “head start” by using his employer’s information to establish his business more quickly than he otherwise could have.
Taking that into account, the judge awarded $50,000 in equitable compensation — roughly half of the $100,000 loss claimed for the 2019 financial year.
The parties will return to court at a later date to argue over legal costs, which could add significantly to the final bill.
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