The Credit Reference Bureau Holdings Ltd (CRBH) has taken its former chief executive officer, Steven Kunyiha, to court for engaging with its competitor.
The company argues that Mr Kunyiha has acted in breach of the agreement by working with Credit Info CRB Kenya Ltd (CI CRBK), a company in direct competition with CRBH, and engaged in the same core business.
The constitutionality of contracts that restrict workers from seeking employment in competing firms is set to come under sharp scrutiny in a suit currently pending before the Employment and Labour Relations Court.
The Credit Reference Bureau Holdings Ltd (CRBH) has taken its former chief executive officer, Steven Kunyiha, to court in a case that will determine whether an employer can, through a contract, continue to have control over where former workers seek employment.
The CRBH and Mr Kunyiha signed a contract of employment detailing express, restrictive clauses that prohibited Mr Kunyiha, for a period of 12 months after termination of his employment, from entering into any employment or engagement with any of CRBH’s competitors and from sharing with the competitors any confidential and proprietary business information obtained while working for the firm.
The company argues that Mr Kunyiha has acted in breach of the agreement by working with Credit Info CRB Kenya Ltd (CI CRBK), a company in direct competition with CRBH, and engaged in the same core business.
The firm had by a contract of employment dated May 30, 2014 employed Mr Kunyiha as its group business development manager. He later rose to the position of chief executive officer, before the contract was terminated on April 5, 2016, upon application by Mr Kunyiha.
On May 11 last year CRBH received information that Mr Kunyiha had considered taking up employment with CI CRBK, a competitor of CRBH.
In its letter of June 10, 2016, to Mr Kunyiha, CRBH advised him to terminate his employment or engagement with CI CRBK with immediate effect, otherwise the first employer would be forced to institute legal proceedings to enforce the clause of the contract of employment that has been dishonoured. He failed to comply leading to the filing of the case before court.
In a recent ruling however, Justice Nelson Abuodha of the Employment and Labour Relations declined to grant temporary orders sought by CRBH to stop Mr Kunyiha from continuing with his new job pending hearing and determination of the case.
The former CEO argues that the clause in the employment contract that restrains him from being employed in any company, firm, and partnerships which compete with his former employer is in contravention of Article 41(1) of the Constitution which provides that every person has a right to fair labour practices. Hearing of the case continues.
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