The NSW Supreme Court earlier this year has considered the enforceability of confidentiality obligations and restraints of trade in the context of a departing employee joining or creating their own business, as a competitor.

The facts:

A former employee of a body sculpting clinic left to commence work with a competing business. The employee brought several staff members with her, and was alleged to misuse her former employer’s confidential information, including client lists, and interference with preexisting customer relationships.

Findings:

The Court granted interim injunctions restraining use of confidential information and interference with client relationships. Further, a  12-month restraint was imposed, which prevented the former employee from working in similar businesses conducted within a 5 km radius.

Relevance:

This decision highlights the Court’s willingness to protect confidential information and goodwill. In this instance, the Court carefully balanced these protections against the overly broad restraint of trade provisions that the former employer sought.

Businesses should ensure: