He joined a competitor, and a week later a court restrained him

What happened

Mauro Ghiringhelli worked for Majors Group Australasia from about 2012. Under the contract he signed in 2015 he was a "Sales Executive Equipment", based in Victoria, on $80,000 a year plus superannuation and a $15,000 vehicle allowance. His job was liaising with existing and potential customers on equipment sales.

His employment ended on about 7 February 2025 and he joined Invidia Foods. He disputed that Invidia was a competitor, but the judge was satisfied, for now, that it was.

Majors applied to the Supreme Court of Western Australia as a matter of urgency on 11 February 2025. On 14 February Justice Howard made temporary orders against Mr Ghiringhelli, after Majors gave the usual undertaking to pay any damages the orders wrongly caused. The application came back for a fuller hearing on 24 February 2025.

The restraint clause

Clause 17.1 of the contract said that, for a period after his employment ended and within a set area, he must not: (a) engage, directly or indirectly, in a business that competes with Majors; (b) solicit or accept approaches from its clients; (c) interfere with its relationships with clients, employees or suppliers; or (d) induce employees to leave.

It was a cascading restraint: rather than one fixed period and area, it listed options and asked for the widest that the law would allow. The period was 12, 6, 3 or 1 months, and the area ranged from the whole of Australia down to Western Australia. The contract also had confidentiality clauses and a separate confidentiality deed.

The legal test

Majors was asking for an interlocutory injunction: a temporary order holding the position in place until a trial. To get one, the employer must show a serious question to be tried and that the balance of convenience favours the order, meaning the risk of harm from refusing it outweighs the harm of granting it. The two are linked: the stronger the case, the less the balance needs to favour the order.

A restraint of trade in an employment contract is enforceable only if it goes no further than is reasonably necessary to protect the employer's legitimate business interests, judged when the contract was made. As the judge put it, an employer "is not entitled to be protected from competition from a former employee per se". Mr Ghiringhelli accepted there was a serious question to be tried; the dispute was over the balance of convenience.

How the judge applied it

Because the test looks back to 2015, the judge focused on the contract and position description. On the evidence so far, he read the role as customer-facing equipment sales. He did not find the evidence of Majors' witness about Mr Ghiringhelli's seniority and importance immediately persuasive, and noted that the pay in the contract did not suggest that kind of role.

Clauses (b) to (d), the no-poaching clauses, were the strongest. The judge found a clear serious question that Mr Ghiringhelli might breach them, and that they had arguably been necessary, when the contract was made, to protect Majors' legitimate interests. It was accepted he could do his new job while bound by them.

The non-compete in clause (a) was different. It was widely drawn and could arguably catch any role with a competitor, which may have gone beyond what Majors needed to protect when he was "only" an equipment sales executive. Without deciding the point, the judge framed the order more narrowly than the clause: the case for restraint was much stronger if limited to a job for the competitor that was the same as or similar to, or involved the same activities as, his work at Majors.

The interest the judge considered may be protected was the personal connection he had built with customers, and possibly suppliers, while Majors held him out to them. Majors' witness gave evidence that Mr Ghiringhelli had travelled to Italy for the new employer's benefit while still employed by Majors. The judge said a reasonable period was the time Majors needed to recruit, induct and introduce a replacement: no more than six months, not the 12 months the clause put first.

The order protecting confidential information also stayed. Majors had not pinned down exactly what information was at risk, but the evidence suggested he had access to some through his phone, and the judge found his evidence about what happened to the phone not immediately satisfactory.

What happened next

The judge accepted there was some force in Mr Ghiringhelli's complaint that Majors had been slow to start its main case. He ordered Majors to begin those proceedings by 4.00 pm on 27 February 2025 and to seek to have them heard quickly, with costs to be decided in that case. He flagged that, at a final trial, there may be argument about whether a court can rewrite a contractual restraint at all. The judgment does not record how the main case ended.

What this means for you

If you are leaving to join a competitor, read your restraint clause first. Even if a clause is arguably too wide as written, a court may make a temporary order enforcing a narrower version of it within days of your last day.

It is worth leaving cleanly: return the employer's information, and be careful what you do for a new employer while still employed. For employers, delay counted against Majors here, and a restraint should fit the actual role. If a restraint is in play on either side, consider getting advice early.