Boss wins payout after worker sets up rival business

An employee who used his boss’ confidential business information to create a competing business has agreed to pay $24,000 in compensation.

But boss Eric Woods said the figure barely scratched the surface of the financial and emotional costs incurred.

The owner of Cozy Homes says he took his former employees John Edward Clancy and Sophie Mullins to the Labor Relations Authority [ERA] has never been a question of money, but of justice.

Clancy and Mullins agreed to pay Woods $24,000 after he accessed and misused company information to create their rival company Living Little.

Clancy solicited his employer’s contractors who provided specialist services and used images and testimonials from Cozy Homes, passing them off as his own on Living Little’s website.

He faced 38 breaches of his contract of employment, with Mullins admitting she aided and abetted him in the breaches, as determined by ERA consent.

Woods started his company in 2016 and has spent years innovating his business and product; affordable portable housing with portable foundations.

His homes were purpose-built and it took years to find suitable contractors who shared his vision, he told Open Justice.

While working at Cozy Homes, Clancy began building the rival business with Mullins’ help.

Clancy asked Woods contractors to do the same work they were doing for Woods, which caused supply problems.

The parties resolved their issues through mediation, but still asked ERA to issue a decision recording the terms of their agreement.

ERA recorded violations such as uploading the Cozy Homes user manual, tool log, fit-out tasks, financial projections and other business documents.

Cozy Homes owner Eric Woods started his business to provide innovative, mobile and affordable housing. Photo / Provided

Mullins copied the “SweetHome3D Plans file” from Cozy Homes, made changes and emailed them to Clancy in July last year, according to the determination.

Photographs of Cozy Homes products have been used on the Living Little website, along with customer testimonials.

Clancy used his work time to seek out a yard where they could set up Living Little and broke any conflicts of interest by approaching companies associated with Cozy Homes, ERA’s determination indicated.

Woods only discovered this when he came across their used images online.

“It was a situation where the more you look, the more things you find that you almost wish you didn’t know,” Woods said.

He told Open Justice that Clancy tried to engage Cozy Homes’ main suppliers.

“We were building things in innovative ways…finding these people wasn’t easy.

“I tried to give him the benefit of the doubt but it was inevitable what was happening.”

Woods described Clancy’s actions as “calculated” and “premeditated”.

The realization that his former employee had done all of this during working hours added salt to the wound according to Woods, who said he was “stunned”.

When Woods started his business six years ago, it was built on hard work and “doing it right,” he said.

Seeing someone take their hard work and hit the ground running with them was hurtful, Woods said.

The legal costs exceeded the settlement, and that did not include salaries while Clancy worked on Living Little, Lost Production, and Lost Contractors.

Despite the loss, taking the case to the ERA and pushing for the decision to be made public was not about compensation, but about justice, Woods said.

“I wanted to see this as a form of justice through the process ultimately.

“It was my consolation, even if I am not compensated for a fraction of my expenses, I try to get as close as possible to justice.”

Mullins declined to comment when questioned by Open Justice and said Clancy was unavailable. He did not respond to emails and text messages.

– Hazel Osborne, Open Justice