Tiny home company to be paid $24k after employee set up rival business while on the job

Cosy Homes owner Eric and wife Carmel Woods said it was about justice when they took their former employees to the Employment Relations Authority. Photo / Supplied

An employee who admitted to breaches of his duty of fidelity to his employer, including downloading his employer's financial projections and setting up a competing business, has agreed to pay compensation.

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

The Cosy Homes owner said taking his former employee John Edward Clancy and Sophie Mullins to the Employment Relations Authority (ERA) was never about money, but justice.

Clancy and Mullins have agreed to pay Woods $24,000 after they accessed and misused company information to set up their rival business Living Little.

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

He faced 38 breaches of his employment agreement, with Mullins admitting she aided and abetted him in the breaches, according to the ERA determination by consent.

Woods established his company in 2016, and had spent years innovating his business and product; affordable, portable accommodation with transportable foundations.

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

While working at Cosy Homes, Clancy began setting up the rival business with Mullins' help.

Clancy solicited Woods' contractors to do the same job they were doing for Woods, which caused supply issues.

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

The ERA recorded breaches such as downloading the Cosy Homes operations manual, tool register, fit-out tasks, financial projections and other business documents.

Cosy Homes owner Eric Woods started his business to provide innovative, movable and affordable housing. Photo / Supplied

Mullins copied the Cosy Homes "SweetHome3D Plans file", made modifications and emailed these to Clancy in July last year, according to the determination.

Photographs of Cosy Homes products were used on Living Little's website, as well as customer testimonials.

Clancy used work time to search for a yard where they could set up Living Little, and breached conflicts of interest by approaching companies associated with Cosy Homes, the ERA determination said.

Woods only found out about it when he stumbled across their images being used online.

"It was a situation of the more you look, the more you find stuff you almost wish you didn't know," Woods said.

He told Open Justice Clancy attempted to engage Cosy Homes' primary suppliers.

"We were building things in an innovative way ... finding those people was not easy.

"I tried to give him the benefit of the doubt but it was inescapable what was happening."

Woods described Clancy's actions as "calculated" and "premeditated".

The realisation his former employee had done this all on company time added salt to the wound, according to Woods, who said he was "dumbfounded".

When Woods started his business six years ago it was built on the foundation of hard work and "doing it right", he said.

To see someone take his hard work and hit the ground running with it was hurtful, Woods said.

The legal costs outweighed the settlement, and that didn't include the wages 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 wasn't about compensation but about justice, Woods said.

"I wanted to look at it as getting some form of justice through the process at the end of the day.

"That was my consolation, even though I'm not being recompensated for a fraction of my costs, I'm trying to get to the closest thing to justice that I can."

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

A previous version of this article stated that Mr Clancy had misused confidential information. In a Consent Determination, the Employment Relations Authority recorded that Mr Clancy's employer withdrew allegations of misuse of confidential information. Mr Clancy and Ms Mullins did admit that the evidence established various breaches of fidelity duties. Ms Mullins disputes she was ever employed by Cosy Homes. We regret any confusion caused.