Qantas has succeeded in its legal bid to temporarily prevent a former executive from joining arch-rival, Virgin Australia. With Nick Rohrlach due to start as CEO of Virgin Australia’s loyalty program, Velocity, on Monday, Qantas was in court on Friday to try to stop this happening.
A last-minute win for Qantas
Singapore’s High Court issued an injunction on Friday preventing Nick Rohrlach from starting work at Virgin Australia on Monday morning. The injunction means Mr Rohrlach will remain in no-mans land until a full hearing takes place regarding the dispute. The full hearing is likely to take place mid-year.
As previously reported in Simple Flying, Nick Rohrlach was a long-time Qantas Group high flyer. His last job at the Sydney-based airline was in Qantas Loyalty, where he was allegedly privy to all manner of Qantas secret loyalty business. So perhaps understandably, Qantas was underwhelmed when, within months of starting the loyalty role, Mr Rohrlach said he was jumping ship to run Velocity at Virgin Australia.
“This is an inglorious sequence of events, to formally accept a new job and as part of the preparation for it receive highly sensitive and confidential information, then turn around just a few weeks later and take a job where that information would give you a real advantage,” a Qantas spokesperson has previously said.
Qantas made Mr Rohrlach serve out his full notice period and wants to enforce a six-month no-compete contractual clause. That would keep their former executive away from Virgin Australia until mid-September.
Qantas takes employment dispute to the courts
With Virgin Australia keen to set their new Velocity CEO to work sooner, Qantas launched legal action to stymie their plans. Before last Friday’s win, Qantas had lost two legal rounds in Sydney. The court in Sydney referred the dispute to Singapore’s courts. Virgin Australia and Mr Rohrlach signed their contract in Singapore. A clause in that contract gave Singapore exclusive jurisdiction over contractual disputes.
While only an injunction, Friday’s ruling is notable because Qantas had twice failed to sway Sydney’s courts. Singapore’s courts also often slant in favor of employees over employers.
Qantas argues Nick Rohrlach has inside information about their loyalty program, which could benefit him in his new role. Qantas is also unhappy Nick Rohrlach failed to tell them he was negotiating a new job with Virgin Australia
Virgin Australia says its a case of sour grapes
For its part, Virgin Australia says it is a case of sour grapes. In a statement following Friday’s injunction, Virgin Australia said;
“Our incoming CEO of Velocity has been temporarily restrained from commencing work with us by the High Court of the Republic of Singapore until the court can hear substantive proceedings relating to Mr Rohrlach’s employment with his former employer, Qantas.
“The substantive proceedings are seeking declarations that restrain provisions, which Qantas are seeking to enforce, are void and unenforceable because they unreasonably stop Mr Rohrlach working for any competitors of Qantas.”
Virgin Australia has been busy headhunting senior Qantas Group employees lately. With new owners, Virgin Australia is seeking to establish itself as a mid-market player.
The airline’s newish CEO, Jayne Hrdlicka, also a former Qantas Group executive, has been busy refreshing Virgin Australia’s top management personnel. The Qantas Group has borne the brunt of this. However, it seems with Nick Rohrlach and its highly valuable loyalty program, Qantas thinks this time Virgin Australia has overreached.