Allied Express Transport Pty Ltd v Mears

In the matter of Allied Express Transport Pty Ltd v Mears, the dispute arose from an employment contract containing a non-recruitment covenant, also known as an anti-poaching clause. The employer, Allied Express Transport Pty Ltd, sought an interlocutory injunction to prevent the former employee, Mears, from engaging or soliciting staff for a period of 12 months following his termination of employment. The Federal Circuit Court was tasked with determining the enforceability of the restraint and whether it should be upheld in light of the evidence presented.

The court considered the legal principles surrounding restraints of trade within employment contracts. It examined whether the restraint was reasonable in all circumstances and whether it was necessary to protect the legitimate business interests of the employer. The court also assessed the evidence to determine if there was a real risk of future breaches of the covenant by the former employee. The key issue was whether the covenant was enforceable given the faint ground for apprehension of future breaches, as evidenced by the circumstances of the case.

In delivering its decision, the court found that there was insufficient evidence to support a real risk of future breaches by the former employee. The evidence suggested that the former employee had made an initial approach to one staff member, but the court was not persuaded that there was a substantial likelihood of further breaches occurring. Consequently, the court refused to grant the interlocutory injunction sought by the employer. The court emphasised that the enforceability of such restraints depended on the specific circumstances and the genuine need to protect legitimate business interests.

The court's final orders were to deny the employer's application for an interlocutory injunction, thereby allowing the former employee to continue his employment without the restrictions imposed by the non-recruitment covenant. This decision underscores the importance of a strong evidentiary foundation in establishing the necessity and reasonableness of restraints of trade in employment contracts.