Maclean v Sauermann

The case of Maclean v Sauermann involved a dispute concerning the validity and reasonableness of a restraint of trade clause in an employment contract. The respondent, Sauermann, was an employee of the applicant, Maclean, and had entered into an employment agreement that included a covenant not to work for any of Maclean's clients for a period of two years following the termination of his employment. Sauermann sought to have the restraint of trade clause declared invalid, unreasonable, and unenforceable. The matter was heard in the Supreme Court of Queensland.

The primary legal issue before the court was whether the restraint of trade clause in Sauermann's employment contract was valid and reasonable. The court was required to consider the nature of the covenant, the interests of the parties, and the public interest in determining the enforceability of the restraint. Specifically, the court had to weigh the balance of convenience in deciding whether an interlocutory injunction should be granted to prevent Sauermann from working for Maclean's clients during the restraint period.

The court held that the restraint of trade clause was valid and reasonable to the extent that it protected Maclean's legitimate business interests, such as trade secrets and confidential information. However, the court found that the balance of convenience favoured Sauermann not being restrained from performing his current employment with Maclean's clients. The court noted that the restraint period of two years was excessively long and that Sauermann had already been working for Maclean for a significant period. Furthermore, the court found that there was no evidence that Sauermann had access to confidential information or trade secrets that would justify the restraint. The court dismissed the application for an interlocutory injunction and declared the restraint of trade clause to be valid and reasonable to the extent that it protected Maclean's legitimate business interests.

The court made no further orders in relation to the restraint of trade clause, leaving it to the parties to negotiate any modifications to the clause if they wished. The dismissal of the application and the declaration of the clause's validity and reasonableness meant that Sauermann was not restrained from working for Maclean's clients during the restraint period, but Maclean was entitled to seek damages for any breach of the clause if Sauermann did so.