ACM Group Limited v McClymont

ACM Group Limited (ACM) and Mr McClymont were the parties in this matter before the Federal Court of Australia. The dispute concerned the enforceability of a restraint of trade clause contained within an employment agreement between ACM and Mr McClymont. ACM sought to restrain Mr McClymont from engaging in conduct that allegedly breached this clause following his resignation from ACM.

The primary legal issue before the Court was whether the restraint of trade clause in Mr McClymont's employment contract was valid and enforceable. This required the Court to consider whether the clause went no further than was reasonably necessary to protect ACM's legitimate business interests, such as its confidential information and customer connections, and whether it was reasonable as between the parties and in the public interest.

Judge Jarrett found that the restraint of trade clause was unreasonably broad and therefore void and unenforceable. The Court reasoned that the clause sought to prevent Mr McClymont from engaging in a wide range of activities that were not directly competitive with ACM's specific business operations. The Court applied the established legal principles governing restraints of trade, which require such clauses to be narrowly drafted to protect only legitimate business interests and to be reasonable in scope, duration, and geographical reach. The Court noted that the onus was on ACM to demonstrate the reasonableness of the restraint.

ACM's application for an interlocutory injunction was dismissed.