Just Group Ltd v Peck

Just Group Ltd sued Peck over the enforceability of a restraint of trade clause in Peck's employment contract. Peck had been employed by Just Group Ltd and signed a contract that included a non-compete clause. After leaving the company, Peck commenced working for a competitor. Just Group Ltd sought an injunction to prevent Peck from working for the competitor, claiming that the non-compete clause was enforceable. The primary dispute centred on whether the restraint of trade clause was reasonable and enforceable, and if not, whether it could be severed to render it enforceable.

The legal issues before the court included whether the restraint of trade clause was reasonable in the circumstances and protected a legitimate business interest of Just Group Ltd. The court also had to determine whether the clause or any specific words within it could be severed to render it enforceable. Just Group Ltd argued that the clause was necessary to protect its confidential information and prevent unfair competition. Peck contended that the clause was unreasonable and overbroad, extending beyond what was necessary to protect a legitimate business interest.

The court found that the restraint of trade clause was unreasonable and not enforceable. It held that the clause extended beyond what was necessary to protect Just Group Ltd's legitimate business interests. The clause was overly broad in scope and duration, covering all competitors and prohibiting Peck from working in any capacity. The court further held that the clause could not be severed to make it enforceable. The court concluded that the clause was not capable of being reasonably modified to fit the legitimate needs of the employer. Consequently, the application for leave to appeal was granted, but the appeal was ultimately dismissed.

The court ordered that the restraint of trade clause in Peck's employment contract was unenforceable. It further directed that no orders for an injunction or damages were to be made against Peck in relation to the clause. The court's decision provided clarity on the enforceability of restraint of trade clauses in employment contracts, emphasizing the need for such clauses to be reasonable and narrowly tailored to protect legitimate business interests.