Johnson v Buderus

In *Johnson v Buderus* [1998] NSWCA 118, the New South Wales Court of Appeal considered a dispute between a former employee, Mr. Johnson, and his former employer, Buderus. The core of the disagreement concerned the interpretation and enforceability of a restraint of trade clause contained within Mr. Johnson's employment contract.

The primary legal issue before the Court of Appeal was whether the restraint of trade clause, which sought to prevent Mr. Johnson from engaging in competitive activities for a specified period after his employment ceased, was reasonable and therefore legally enforceable. This required the Court to assess whether the clause went beyond what was necessary to protect the legitimate business interests of Buderus.

The Court applied established principles of contract law concerning restraints of trade. It considered the scope of the restraint in terms of geographical area, duration, and the nature of the prohibited activities. The Court reasoned that for a restraint to be valid, it must be no wider than is reasonably necessary to protect the employer's proprietary interests, such as trade secrets or customer connections, and not merely to stifle competition. The Court ultimately found that the restraint in question was too broad and therefore void as an unreasonable restraint of trade.