The Qantas (ASX: QAN) share price is dipping after the Supreme Court rejected the company’s case against an ex-executive starting at Virgin.
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The Qantas Airways Limited (ASX: QAN) share price is slipping today following a failed first round of legal proceedings. The effort to delay the commencement of an ex-executive’s employment at Virgin now looks less likely to succeed.
Although the decision was made by the New South Wales Supreme Court last Friday, publications surrounding the news have begun to arise over the past 24 hours. At the time of writing, the Qantas share price is trading 2.06% lower at $5.22. By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.19%.
Jurisdiction falls to Singapore, hitting Qantas share price
As we reported earlier in the month, Qantas decided to take former Jetstar Japan (Qantas subsidiary) executive, Nick Rohrlach, to court.
Qantas reasoned that Mr Rohrlach had access to trade secrets pertaining to its loyalty program following acceptance of his previous position with Qantas.
However, Rohrlach went on to accept the position of chief executive of Virgin’s Velocity program. Hence, Qantas fought for the ex-employee’s start date to be moved from May to September.
The NSW Supreme Court rejected Qantas’ bid for the case to be heard in Australia, rather than Singapore, where Rohrlach signed a contract with Qantas back in 2015. Qantas argued that a hearing in Singapore would need to be conducted remotely and that the causes of action have no connection to Singapore.
All of these reasons were laid to rest by the court, which stated, “Proceedings have to be conducted remotely… is a matter of mere inconvenience. Remotely conducted proceedings have been the order of the day for more than a year now.” And, “That the causes of action may have no connection with that jurisdiction has little to say as to the appropriateness of enforcing an express submission to jurisdiction.”
It is clear Qantas wanted to avoid the hearing moving to the Singapore jurisdiction, as Mr Rohrlach had applied for anti-suit protection there last month to prevent the extended wait.
Qantas’ next move?
Reportedly, Qantas will appeal the decision with the argument being:
All the parties are in New South Wales, and Mr Rohrlach’s new role is in Sydney, so it doesn’t make much sense to go to Singapore to resolve this. Independent of geography, our argument is simple. Virgin is trying to shortcut the time Mr Rohrlach is required under his contract to wait before accepting a role with a direct competitor.
Qantas was also ordered to reimburse the defendant’s legal costs following the dismissal of the plaintiff’s motion.
The Aussie airline’s market capitalisation is now $10.1 billion, accounting for the move in the Qantas share price today.
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.