Virgin court win against Qantas over incoming Velocity CEO Nick Rohrlach

Virgin Australia has won the first round of a court battle with Qantas over the employment of an ex-Jetstar executive.

Qantas CEO Alan Joyce and Virgin Australia CEO Jayne Hrdlicka remain friends despite the fierce rivalry between the airlines. Picture: Dylan Coker/NCA NewsWire

Virgin Australia has won the first round of a court battle with Qantas over an ex-Jetstar executive set to become the new Velocity CEO.

Qantas took legal action after it was announced Jetstar Japan CEO Nick Rohrlach was jumping ship to head up Virgin Australia’s loyalty program.

It was revealed that a few weeks before he resigned, Mr Rohrlach had accepted a senior position with Qantas Loyalty and in the process was given access to sensitive commercial information.

In response, Qantas demanded Mr Rohrlach delay his start with Virgin until September 18, 2021, four months later than planned.

The larger airline argued he was contractually obliged to give them three months’ notice of his departure, and then serve out a six month non-compete clause.

Mr Rohrlach and Virgin Australia sought to have the matter heard in Singapore while Qantas wanted to have the case heard in New South Wales.

On Friday, New South Wales Supreme Court judge David Hammerschlag dismissed Qantas’ motion, finding a clause in Mr Rohrlach’s original contract must be upheld.

“This agreement is governed by the law in force in Singapore,” said the clause.

“The parties agree to submit to the exclusive jurisdiction of the courts of Singapore.”

The decision is expected to help Mr Rohrlach argue his case to begin with Virgin Australia on May 3 as agreed, instead of September 18.

Justice Hammerschlag also ordered Qantas to pay Mr Rohrlach’s and Virgin Australia’s costs.

The case has highlighted the fierce competition between the airline groups, particularly with regards to their prosperous loyalty programs.

Virgin Australia has been without a Velocity CEO since January 2020, when Karl Schuster departed.

Valued at more than $1bn, the loyalty business was the only part of the airline that was not placed in administration last April.

However it was included in the sale to US private equity firm Bain Capital who installed former Jetstar and Qantas executive Jayne Hrdlicka as Virgin Australia’s new CEO.

Since her appointment, Ms Hrdlicka has appointed five of her former colleagues at Qantas and Jetstar including Mr Rohrlach, chief people officer Lisa Burquest, chief transformation officer Alistair Hartley, chief customer and digital officer Paul Jones and chief corporate affairs officer Moksha Watts.

A Virgin Australia spokeswoman said they were “pleased with the judgment” in the Supreme Court of NSW.

However Qantas indicated it would appeal the decision over jurisdiction.

“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,” said a Qantas spokesman.

“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.”

The spokesman said it was “an inglorious sequence of events to formally accept a new job and receive highly sensitive and confidential information in preparation for it, then turn around just a few weeks later and take a job where that information would be a real advantage”.

“At no point after negotiations between Mr Rohrlach and Virgin began, and right up until he informed Qantas of his new role at Velocity, was it suggested that the flow of information from Qantas should cease,” the spokesman said.