Former employee claims he is owed $22,000 from Crane Brothers founder Murray Crane

Crane Brothers founder Murray Crane. Photo / Jason Oxenham

An employee who previously worked for Crane Brothers founder Murray Crane is pursuing the businessman for more than $22,000.

Jordan Gibson, who was employed by 1949 Limited and holds a 10 per cent stake in that company, claims he is owed $22,372 in unpaid wages, holiday pay, Kiwisaver contributions and leave entitlements from Crane.

Gibson is also seeking a penalty against Crane for "aiding and abetting a breach" of his employment agreement with 1949 Limited, according to an Employment Relations Authority (ERA) decision.

1949 Limited operated as a clothing business and after it closed down and went into liquidation, Gibson opened a business of his own running a clothes shop. The shop was on the same street as a separate clothing retailer that "Crane has interests in".

"This situation, and Mr Gibson's earlier involvement as a shareholder in the failed business operated by 1949 Limited, adds elements of commercial interest and personal disappointments that make the contest between the parties somewhat more than a simple employment relationship problem," the ERA's decision.

Authority member Robin Arthur initially said the case should be moved to the Employment Court.

Crane agreed while Gibson opposed the move.

Gibson's lawyer said his client should not have to face the cost and effort of pursuing his claim through the court.

"The claim concerning restraint provisions in Mr Gibson's previous employment agreement with the company now in liquidation faces a number of hurdles. The fairly standard clauses in the restraint term prohibited involvement with 'any business in competition' with the employer as well as solicitation of employees or customers," Arthur said.

"One factual and legal issue is whether any new business operated by Mr Gibson could even be in competition with the business of the company now in liquidation and, by definition, unable to trade. There may, arguably, be a proprietary interest (protectable by a restraint) in customer or trade connections that amount to an asset of some potential value in a liquidation," she said.

"However, if such a restraint remained enforceable and was breached, it would be difficult to assess damages, in terms of custom or trade lost, for a closed shop. The public policy concern about free exercise of skills and experience might also weigh against the enforceability of a restraint where the business operated by the former employer had closed its doors and could not offer employment in any event."

The liquidator's report for 1949 Limited, for the six months ending December 2017, said it was likely "preferential creditors" would be paid in full and a dividend would be made to creditors who filed a proof of debt document.

The ERA later determined the case should not be pursued solely through the Employment Court.

"The commercial backdrop – relating to the failed business in which Mr Gibson and Mr Crane were involved – and any personal animus that may have ensued are irrelevant to the factual issues to be determined in the employment jurisdiction regarding arrears, liability for them and, if that separate claim is pursued, the enforceability of restraint terms," Arthur said.

In a statement to the Herald Crane said 1949 Limited ceased trading in 2017.

"What Mr Gibson is claiming is disputed and has always been disputed and will be determined by the Employment Relations Authority," Crane said.

The case is ongoing and the ERA has ordered another hearing.