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ARTICLE · 20 OCTOBER 2022

When will a restraint of trade clause be enforceable?

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A 9-month restraint clause was held to be reasonable and enforceable against a sales manager who joined a competitor.

AustraliaEmployment and HR
Rachel Drew
Rachel Drew
James Phillips
James Phillips
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In the recent appeal judgment of McMurchy v Employsure Pty Ltd; Kumaran v Employsure Pty Ltd [2022] NSWCA 201, the Court of Appeal of New South Wales has upheld a decision that a nine-month post-employment restraint clause was reasonable and enforceable against a former sales manager who joined a competitor's business. The court also upheld the finding that the former sales manager had poached a colleague in breach of his duties owed to his former employer.

Background

Mr David McMurchy was employed as a sales manager for Employsure, a company that provides software programs to manage and automate human resources functions for small and medium-sized businesses. Mr McMurchy's contract of employment included the following clauses:

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