Phd Creative Pty Ltd

The proceeding concerned a dispute between Phd Creative Pty Ltd and its former director, Claudia Murray. Phd Creative sought to enforce a restraint of trade clause contained within Ms Murray's employment contract, which purported to prevent her from engaging in competitive activities for a period of 12 months following her resignation. Ms Murray had resigned from her position and subsequently commenced employment with a competitor.

The central legal issue before the court was whether the restraint of trade clause was valid and enforceable. Specifically, the court was required to determine if the clause went no further than was reasonably necessary to protect Phd Creative's legitimate business interests, considering the scope, duration, and geographical reach of the restriction.

The court considered the principles governing restraints of trade, noting that such clauses are prima facie void as being contrary to public policy unless they can be justified by the party seeking to enforce them. It examined the nature of Phd Creative's business, the specific role Ms Murray held, and the information and relationships she had access to during her employment. The court found that the restraint, as drafted, was broader than necessary to protect Phd Creative's legitimate interests, particularly in relation to its geographical scope and the definition of competing activities. The court applied the established legal test for reasonableness, balancing the employer's need for protection against the employee's right to work.

The court ultimately found the restraint of trade clause to be unreasonable and therefore unenforceable. Accordingly, Phd Creative's application to enforce the clause was dismissed.