Supreme Court Rejects Employer's Attempt to Restrict Former Employee
📌 In brief
The Supreme Court of New South Wales ruled against an employer's request to stop a former employee from working for a competitor. The court determined that the restrictions violated public policy and were therefore invalid.
⚖️ Legal holding
An employer cannot enforce a restraint of trade that breaches public policy.
📖 Technical summary
The court dismissed the claimant's request for injunctive relief against the defendant, finding the restraints void for breaching public policy.
📚 Full judgment
The summary, holding and questions above are VadeLab’s own material. The official decision itself is published by the court, and we do not reproduce it on this page.
📄 Read the full judgment⚖️ View on the official court website ↗
⚖️ What tends to weigh in cases like this
✅ Tends to be accepted
- The court found no evidence that the former employee would breach the restraint clause as it was read down to apply in Australia for six months.
- The court would not grant the injunction because the restraint on the former employee's new employment was too broad.
- The court found no evidence that the former employee had solicited clients or employees.
- The former employee's contact with ex-employees after their employment had ceased was not a breach of the contract.
❌ Tends to be rejected
- The employer's argument that the new company was a prospective competitor was not established by the evidence.
- The court rejected the argument that an injunction should be granted because other persons might assist in soliciting clients.
- The court rejected the argument that an injunction should be granted because the former employee targeted customers in New Zealand.
Patterns observed in similar cases in this collection — every case is unique.
❓ Frequently asked questions
What was the dispute about?
The claimant sought to prevent the defendant from working for a competitor and soliciting the claimant's clients and employees.
How did the court decide, and why?
The court decided that the restraint of trade was void for breaching public policy, as outlined in the Restraints of Trade Act 1976 (NSW).
What was the argument that mattered most?
The argument that mattered most was that the restraint of trade violated public policy, making it void.
Was the decision for or against the person who brought the case?
The decision was against the person who brought the case, the claimant.
What does this mean for someone in a similar situation?
Someone in a similar situation might find that restrictive covenants in employment contracts are void if they violate public policy.
What evidence or documents mattered?
The judgment does not specify the exact evidence or documents that mattered.