In this practice area
Employer advice on post-employment restraints, confidential information, customer connections and urgent enforcement in NSW and interstate disputes.
Protecting a business when a key employee leaves
A senior departure can expose customer relationships, confidential pricing, product development and team stability. The first question is what the business is legally entitled to protect. A restraint is not a general entitlement to prevent competition or to control a former employee's career. Protection must be linked to an identifiable interest and a restriction that the applicable law will support.
We act for employers assessing and enforcing post-employment obligations. Non-compete clauses, customer non-solicitation, non-dealing, employee non-solicitation and confidentiality provisions are different restraints or obligations. Their wording, purpose and legal treatment should not be collapsed into a single assumption that a signed contract prohibits every form of competitive activity.
The immediate facts matter: the employee's role, the information actually accessed, the customer relationships they held, the termination circumstances, the new role and the conduct said to breach the obligation. An employer should distinguish a threatened breach from a suspicion and identify the practical protection it needs before sending broad demands.
Reasonableness and the NSW statutory framework
At common law, restraints require justification by reference to legitimate interests and reasonableness. In NSW, section 4 of the Restraints of Trade Act 1976 provides that a restraint is valid to the extent it is not against public policy, whether or not it is expressed in severable terms. This can permit partial enforcement, but it does not make every restraint valid or relieve the employer of the need to justify the scope sought.
Duration, prohibited activities, geographic reach and the class of customers or employees affected need to be examined against the role and interests involved. A six-month or twelve-month period is not automatically reasonable. Courts distinguish genuinely confidential information and customer connections from general skills, experience and ordinary competition. A restriction broader than necessary may be difficult to enforce.
The governing law, place of employment and interstate connections can affect the analysis. A NSW governing-law clause should not be treated as an automatic enforcement advantage everywhere. Cascading clauses also require careful construction; selecting the shortest option after a dispute begins does not answer every issue about public policy or drafting.
The employee's exit can affect the employer's contractual position. Alleged repudiation, whether the agreement remains enforceable and the relationship between notice, garden leave and post-employment restrictions should be reviewed before relief is threatened.
Urgent injunctions require a precise evidentiary case
Where a competitor role starts immediately or information is at risk, delay can undermine the protection sought. An urgent assessment should identify the agreement relied on, the particular clause, the breach or threatened breach, the remaining restraint period and the orders that would address the business harm. An injunction is discretionary, not a routine consequence of sending a demand.
For interlocutory relief, the court considers matters including whether there is a serious question to be tried and the balance of convenience. The adequacy of damages, urgency, hardship, the strength of the case and the practical effect of an interim order can be significant. Interim relief does not finally determine whether the restraint is enforceable.
An employer seeking relief will generally need to address the usual undertaking as to damages, which can create liability if the injunction later proves unjustified. Without-notice applications raise additional disclosure obligations. Costs and the commercial value of the remaining period should be weighed before committing to proceedings.
Evidence may include access logs, downloads, CRM activity, customer correspondence and the former employee's communications. Collection must be lawful and appropriately scoped. Do not access personal accounts or devices without a proper basis, and do not destroy potentially relevant material while seeking return or deletion of information.
Confidential information and negotiated protection
Confidentiality obligations may arise under contract and equity independently of a disputed non-compete. The employer still needs to identify the information, its confidential quality, its ownership or entitlement and the misuse or risk of misuse. Describing everything learned during employment as confidential is unlikely to provide a reliable foundation for relief.
Practical measures can include focused correspondence, undertakings about specified customers, preservation and return of records, access restrictions and a supervised information-handling protocol. A narrow undertaking may achieve useful protection faster than litigating a broad prohibition on employment. Any deletion arrangement should preserve evidence required for an existing or reasonably anticipated dispute.
Claims against a new employer need their own legal and factual basis. Hiring a former employee does not automatically make the new business liable. Alleged inducing breach, misuse of information or other conduct must be analysed rather than asserted as a negotiating slogan.
Where loss has occurred, damages or other relief depend on the cause of action and evidence. The business should track diverted opportunities and measurable harm without assuming that every lost customer resulted from a breach.
Contract review and proposed non-compete reforms
The Australian Government has proposed non-compete reforms intended to operate from 2027, subject to legislation. Official exposure-draft consultation in September and October 2026 does not, by itself, establish an enacted prohibition or an operative commencement date. Employers should obtain current advice on legislation, commencement and transitional provisions before relying on a restraint or changing contract terms.
The proposed treatment of non-competes should not be assumed to be identical to the treatment of customer restrictions, confidentiality, co-worker restraints or inter-business no-poach arrangements. Different categories can engage different employment and competition issues. Nor should businesses assume that all existing contracts will be grandfathered, invalidated or treated retrospectively without checking the law as enacted.
A sound contract review starts with role-specific interests, proportionate scope and clear drafting, supported by information security and exit procedures. Contract language cannot substitute for an actual legitimate interest. Redrafting should not be presented as a way to evade any future statutory prohibition.
For an immediate dispute, the applicable law and facts at the relevant time remain the focus. A proposed reform is not a reason to ignore existing obligations, nor a basis to promise that enforcement will remain available indefinitely.
Preparing the employer’s enforcement position
Bring the executed contract, variations, promotion letters, role description, remuneration arrangements, notice correspondence, garden-leave instructions and relevant customer or team relationships. Record the suspected acts, dates, competitor start date and source of the available evidence. Identify which information matters commercially and what outcome would actually protect the business.
We assess enforceability and urgency, advise on preserving evidence, prepare proportionate demands and negotiate undertakings. Where court relief is justified, the application should be directed to precise conduct and supported by evidence that demonstrates why damages alone may not be adequate. The objective is lawful protection of the employer's business interests, not an unnecessary restriction on ordinary competition.
Legal framework