Is Graham Henry painted black or blue?

The Dominion Post - Tuesday, 11 September 2012

Sir Graham Henry added extra excitement to the Rugby Championship when he kitted up in an Argentinian uniform and linked arms with the passionate Pumas in Lower Hutt last week.

Henry’s recent appointment as technical adviser to the Blues led to the termination of his contract with the New Zealand Rugby Union. This freed him to provide coaching assistance to the Pumas against the All Blacks.

This change caused much gnashing of teeth last week, with the fear that all of the All Blacks’ secrets will be laid bare before the Pumas.

NZRU chief executive Steve Tew has said of Henry’s role with Argentina: “We wouldn’t have been comfortable under the contract we had with him, but he’s a free agent and he can make his own calls.”

Many media commentators have been less charitable.

Clearly New Zealand rugby coaches have always helped coach overseas teams. Henry and Steve Hansen both together coached Wales for a period. John Kirwan coached Japan before returning to coach the Blues. Robbie Deans currently coaches the Wallabies and will have a great insight into those leading All Blacks who have played for Canterbury, such as Dan Carter and Richie McCaw.

The issue is not confined to rugby. One of the more painful examples was when Russell Coutts and Brad Butterworth “defected” from Team New Zealand to Alinghi.

So what can an employer do to protect confidential information and their intellectual property?

Employees have a duty of fidelity not to compete with their employer so long as they are employed. Employees also have a duty not to disclose confidential information to competitors, but this endures post-employment.

This duty prevents an exemployee from disclosing confidential information that is in the nature of a trade secret. Usually this includes designs, secret methods and secret information. Henry surely has a treasure trove of information. He knows what makes the players and the team tick. Undoubtedly he would have implemented a number of systems and procedures during his time that the All Blacks will continue to use. He has the “good oil”, as they say.

On the other hand, the courts recognise an old employer cannot prevent their employee working in the area of their expertise. You cannot drive a person from working in the industry and workers cannot simply unlearn what they know.

A balance can be struck between these two principles by having a restraint-of-trade clause. Restraints preventing a person working in an industry must be reasonable and limited by the time they run, the area they cover, and be focused on protecting the old employer rather than stopping the ex-employee working. If they go too far the courts will strike them down as illegal. Many court cases are heard on this issue. Usually employers are aware that ultimately ex-employees will be able to recommence work in the industry, so compromises are usually struck.

Steve Tew has said that it would be “too costly” to restrain any former employee’s use of intellectual property or expertise for any length of time. So should we be concerned that Henry has been given a free pass as a free agent to reveal All Black secrets?

Surely such fears are unfounded. In the main, the technical skills and knowledge that Henry brings are not so highly confidential to be trade secrets. They are more in the way of best practice. His role is to help Argentina to be the best team they can be and simply applying the All Blacks’ “secrets” would be to ignore the strengths of Argentine rugby. Still, there was a collective sigh of relief when the familiar face was not in the Puma coaches’ box last Saturday night.

Henry would be aware of the need for confidentiality around information in the nature of trade secrets and has said publicly it would be different if he were coaching one of the teams traditionally in the top echelon, like England, Australia or South Africa. The NZRU has also publicly supported a stronger Argentina. It will mean stronger competition for the All Blacks, which can only be good.

As a good employer, NZRU appears to have taken a pragmatic approach. And Henry, I suspect, knows that helping Argentina now will pay dividends for the All Blacks in years to come. He may be wearing blue on the outside, but underneath you have to think that he is still all black.