{"id":670,"date":"2016-11-18T05:46:43","date_gmt":"2016-11-18T05:46:43","guid":{"rendered":"http:\/\/workplaceculturematters.com.au\/?p=670"},"modified":"2016-11-21T00:44:00","modified_gmt":"2016-11-21T00:44:00","slug":"post-employment-restraints-either-side-of-the-murray-murky-territory-for-employers-and-employees","status":"publish","type":"post","link":"https:\/\/workn.net.au\/?p=670","title":{"rendered":"Post employment restraints either side of the Murray – murky territory for employers and employees"},"content":{"rendered":"

We tend to think that\u00a0the main differences between New South Wales and Victoria concern\u00a0the trams, ‘hook turns’, and AFL. \u00a0When it comes to the business, economics, law, and our fundamental rights, there is a general understanding that the law that governs one Australian should be the law the governs all.<\/p>\n

But this is not always how things play out.\u00a0 And the difference in enforcement of post-employment restraints either side of the Murray river is one of the more interesting examples. \u00a0A recent case from the Victorian Supreme Court demonstrated this emphatically. \u00a0\u00a0In Just Group Ltd v Peck <\/em>[2016] VSC 614, <\/strong>the company brought action against their former CFO, Nicole Peck, to restrain her from joining Cotton-On Group, the company\u2019s main rival.\u00a0 The court held that their clause restraining Ms Peck was unreasonable, because the restraints were broader than required to protect the company\u2019s legitimate interests.\u00a0 Despite the fact that the clause was negotiated in good faith between the parties when the Ms Peck joined Just Group, the company were unable to rely upon it.<\/p>\n

Both companies operate retail outlets homogenously throughout Australia.\u00a0 But had the governing law of the contract been New South Wales, there is no question the employee would have been restrained. \u00a0How could such a different result be possible?<\/p>\n

In New South Wales, the Restraint of Trade Act 1975<\/em> (NSW) allows a court to modify a restraint clause if it is unreasonable.\u00a0 A tiny, technical, and uncontroversial piece of legislation, which has massive impacts on the human rights of workers. \u00a0To understand this difference, and how it would have applied in this case, it is important to understand how the common law applies outside New South Wales.\u00a0 Put simply, a clause purporting to restrain an employee, can do no more than is \u2018reasonable\u2019 to protect a legitimate interest of the employer. \u00a0If it attempts to do so, then the entire clause is unenforceable, and will fail.<\/p>\n

Ms Peck\u2019s contract attempted to stop her for a period of two years from performing \u2018any activity<\/strong><\/em>\u2019 which was either:<\/p>\n