Scyne Advisory fails in its court bid to impose a non-compete clause on partner

A former PwC partner who joined Scyne Advisory will be allowed to join Downer EDI, however she may face more court action from her former employer and others could be in its sights too.

Former PwC partner and now Scyne Advisory executive Connie Heaney arrives at the Supreme Court. Picture: John Feder

Scyne Advisory is planning further court action against its former defence partner Connie Heaney, who left to join rival Downer EDI, as the government consulting operation weighs up taking aim at other partners who have left the private-equity backed operation in recent months.

The Australian understands Scyne, which Allegro Funds purchased from PwC Australia in a $1 deal, is closely looking at up to nine partners who left the firm since its split, amid concerns they may have breached non-compete deals.

This comes after the NSW Supreme Court blocked Scyne’s bid to stop Ms Heaney moving to Downer EDI.

Justice Guy Parker said Scyne’s urgent attempt to bar her from joining the ASX-listed engineering consulting operation, claiming it was a breach of her non-compete obligations, had come too late.

In his judgment on Friday, Justice Parker warned Scyne’s bid, in an injunction application on Monday, had come months after the firm first learned of her intention to leave.

The loss comes after
Scyne’s first attempt to block the move was stymied by Justice Parker on Monday.

However, the judge left the door open to a future fight between both sides, noting Scyne could seek to argue its case in a more substantive hearing and force Ms Heaney out of work at Downer over competition concerns.

Justice Parker ordered Scyne pay Ms Heaney’s costs.

Scyne is understood to be pushing ahead with a planned case against Ms Heaney in the coming weeks, in a bid to force its defence partner away from work with Downer that would cross into territory covered in her former role.

Ms Heaney could be barred from working with Downer for up to 12 months under her Scyne contract.

This is in addition to its earlier injunction, with an application set down before Justice David Hammerschlag on March 15.

Scyne is also weighing up further action it may need to take against nine other partners who have left the consulting operation since November.

Scyne carried over almost 1000 staff from PwC, as well as a further 100 partners of the audit and consulting firm.

However, the firm has faced reduced government spending on consulting.

Justice Parker said he was “satisfied” there was a “serious question” about Ms Heaney’s move to Downer, noting the firm competed with Scyne providing services to government.

He said he may have been inclined to grant Scyne “relief” if the consulting operation had brought its case earlier.

“But in my view the delay tips the balance the other way,“ Justice Parker said.

“It has not been adequately explained.”

The judge took issue with Scyne’s two to three month delay in taking action against Ms Heaney, after first finding out she would leave the firm in November and warning her
in December it would be a breach of her non-compete obligations.

Judge Parker said if Scyne had brought the fight to court then, the matter “would have been well on its way to decision by now”.

“I think it would be most unreasonable now to restrain Ms Heaney from continuing with a well-signalled intention simply because Scyne has now belatedly discovered the urgency of the case,” he said.