Just Group defection case reveals rewards for loyalty

Mark McInnes admits his Just CEO contract is less restrictive than clauses imposed on a defecting executive.

Just Group CEO Mark McInnes with chairman Solomon Lew.

The $2.5m a year boss of Solomon Lew’s Just Group, Mark McInnes, has told the Victorian Supreme Court he gets paid to not take up work with a rival — a benefit not enjoyed by former chief financial officer Nicole Peck.

Mr McInnes was giving evidence this morning on behalf of Just, a subsidiary of Mr Lew’s ASX-listed Premier Investments (PMV), in a bid to stop Ms Peck taking up an equivalent job at Cotton On.

He told the court he brought Ms Peck, who has since defected to bitter rival Cotton On, “out of the wilderness” by bringing her back to retail after a stint in the health industry.

Mr McInnes was giving evidence this morning on behalf of Just, a subsidiary of Mr Lew’s Premier Investments, in a bid to stop Ms Peck taking up an equivalent job at Cotton On.

At the core of the dispute is a battle for territory in the lucrative novelty stationery sector, where Just’s Smiggle chain is a potential competitor to Cotton On’s Typo.

Mr McInnes told the court he met three times with Ms Peck before she started work in January this year.

At the final meeting, at Just’s Richmond office on November 25, he asked her a long list of questions.

“I asked questions like, I’m looking for a long-term partner to build with me ... this is my life, can I trust you?

“Nicole, do you have any reservations, any concerns ... this is a mutual partnership.”

He said Ms Peck replied that one of her weaknesses was loyalty.

A clause in Ms Peck’s contract forbidding her from working for 50 retail brands for two years after she ceased employment at Just was fair because she was being brought back to retail from the health sector, “and giving her my right-hand job”, he said.

“This part was talking about what was a fair notice period given we were bringing her out of the wilderness.”

He said Ms Peck’s role was the only job at Just, apart from his, that had oversight of all seven brands controlled by the company.

However, he admitted that while his contract means he gets paid his base salary of $2.5m a year not to defect to a competitor, such as H & M, Ms Peck’s deal contained no such provision.

“If Premier pay me, I can’t work there,” he said. “If Premier don’t pay me, I can work there.”

He admitted his restraint period was half the length of Ms Peck’s but said the list of brands from which he was banned from working was at least as long as hers.