ARTICLE · 06 JULY 2018

What constitutes reasonable restriction when examining restraint clauses in employment contracts?

Kott Gunning

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This case reinforces the WA court's approach to the enforcement of restraint clauses in contracts of employment.

AustraliaEmployment and HR

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The Supreme Court of WA has granted an interlocutory injunction in favour of Austal Ships (Austal) preventing one of its former employees from being engaged in marine operations as an employee of one of its competitors pending the final decision by the court on what constitutes 'Reasonable Restriction' when examining restraint clauses in employment contracts.

Background

Austal designs, builds and maintains large ships for both commercial and naval customers around the world. Austal was one of three companies competing to perform work on the construction of offshore patrol vessels (the OPV project) for the Commonwealth of Australia. However, Austal was unsuccessful in obtaining the project and it was instead offered to one of the competitors, Civmec.

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