Janala Pty Ltd v Hardaker

Janala Pty Ltd, a company in the field of architectural services, sought an interlocutory injunction against one of its former employees, Mr Hardaker, who had recently joined a competitor firm. The plaintiff claimed that Mr Hardaker breached his contract of employment by contravening a restraint of trade clause. The dispute was heard by the Federal Circuit Court of Australia. The primary legal issues before the Court were whether Mr Hardaker should be enjoined from working for the plaintiff’s competitor in any capacity and, in the alternative, whether he should be allowed to work for the competitor in a limited capacity without client contact.

The Court found that Mr Hardaker had indeed contravened the restraint of trade clause in his contract by soliciting former clients of the plaintiff. However, the Court noted that Mr Hardaker had provided undertakings to refrain from soliciting employees and customers of the plaintiff. The remaining issue pertained to whether Mr Hardaker should be restricted from working for the plaintiff’s competitor in any capacity or, if not, whether he should be permitted to work for the competitor in a limited capacity without client contact. The Court determined that, given Mr Hardaker’s undertakings and the potential for minimal competitive harm, it would grant interlocutory relief in the form sought by the defendants, referred to as the “warehouse proposal”. This proposal allowed Mr Hardaker to work for the competitor in a limited capacity without client contact, subject to certain conditions.

In conclusion, the Court granted the interlocutory injunction in the form of the “warehouse proposal”, allowing Mr Hardaker to work for the plaintiff’s competitor without client contact. This decision balanced the need to protect the plaintiff’s business interests with the need to provide Mr Hardaker with an opportunity to gain meaningful employment. The Court emphasised that the final orders were interlocutory and that the matter would proceed to a final hearing to determine the full extent of any breaches and appropriate remedies.