ECN loses trust with leaving staff

Nashua-ECN MD, Andy Openshaw says that the company has already started a process of replacing the employees who have tendered their resignation, and in some cases already left the company to join start-up, AppChat.

In late March 2012, JSE-listed electronics group, Reunert announced that it had instituted proceedings against AppChat founder and former Nashua-ECN CEO, John Holdsworth, seeking to enforce contractual restraint of trade and confidentiality undertakings given by Holdsworth in favour of Reunert.

This followed Reunert’s acquisition of the ECN Telecommunications business in June last year (2011).

Holdsworth stepped down as CEO of ECN and started AppChat, an end-to-end IP-based mobile network, and would be competitor for Nashua-ECN, Reunert claims.

Holdsworth is fighting Reunert, and claims that Nashua-ECN operates in the fixed-line market, whilst AppChat intends to operate in the mobile market.

Reunert also claims that Holdsworth poached a number of staff from the group to work at AppChat.

Openshaw told BusinessTech that as many as eight or nine staff are involved. He noted that two people had already left the company, with the remaining personnel in the process of serving out their notice period to the end of the month.

“Due to the nature of this [court battle] a lot of trust has been lost with those employees,” Openshaw said. The company head added that Nashua-ECN has already initiated a process to employ new staff.

Reunert and AppChat appeared in the Pretoria High Court on Tuesday (17 April 2012).

“The North Gauteng High Court today ruled that John Holdsworth and his company AppChat are prohibited from employing any of the employees or former employees of Reunert until a hearing is held towards the end of May,” ECN said in a statement.

“The Court also directed Mr Holdsworth to abide by the terms of the restraint contained in his contract of employment with Reunert,” it said.

However, Holdsworth told MyBroadband BusinessTech that he does not believe that he is in breach of any restraints, and it is therefore business as usual at AppChat until a court ruling on the matter.

Following Reunert’s initial proceedings against Holdsworth in March, the entrepreneur hit back saying that Reunert’s claim that AppChat is establishing a business in competition with Nashua ECN is “transparent nonsense”.

The AppChat CEO said that “Reunert is a large listed company and is simply conducting itself as the proverbial corporate bullyboy, using ECN, a fixed-line operator, as a proxy for one of its other companies, Nashua Mobile, in order to stifle future competition in the mobile market”.

Court date set

Reunert and AppChat will be back in court on May 29, 2012.

AppChat attorneys, Knowles Husain Lindsay Inc said in a statement that John Holdsworth and AppChat were “successful in opposing the grant of the extensive relief sought by Reunert”.

“Rather, the court postponed the hearing to May 29, 2012 in order to enable Holdsworth and AppChat to file affidavits and place their version before the court, whereafter a full and proper hearing can take place.”

Holdsworth highlighted that the court did not make a ruling on the restraint. “Therefore abiding by the restraint in the interim is completely open to the interpretation of the parties,” Holdsworth said.

“Our view is that we are not in breach of any restraints and do not intend to breach any of the restraints, therefore, as far as we are concerned it is business as usual until the 29th.”

“The only impact is on the employees, but that, in effect, is only a two week holding pattern until the matter is heard on the 29th of May, as the employees resignation periods only expire in mid-May,” he concluded.

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ECN loses trust with leaving staff