Protectex Chemical Industries Pty Ltd v Morkaya

In *Protectex Chemical Industries Pty Ltd v Morkaya* [1996] NSWCA 438, the New South Wales Court of Appeal considered a dispute between Protectex Chemical Industries Pty Ltd (the appellant) and Morkaya (the respondent). The case concerned the enforceability of a restraint of trade clause contained within an employment contract.

The primary legal issue before the Court of Appeal was whether the restraint of trade clause, which sought to prevent the respondent from engaging in a competing business for a specified period after the termination of his employment, was reasonable and therefore legally enforceable. This involved an assessment of the scope, duration, and geographical reach of the restraint in light of the employer's legitimate business interests.

The Court applied established principles of contract law concerning restraints of trade, which are prima facie void unless they can be shown to be reasonable in the interests of both the parties and the public. The Court examined the nature of the respondent's employment, the confidential information and trade secrets to which he had access, and the potential harm to the appellant's business if the respondent were to compete. The Court ultimately found that the restraint of trade clause was wider than reasonably necessary to protect the appellant's legitimate business interests and was therefore unenforceable.

The appeal was dismissed, with the Court of Appeal upholding the decision of the lower court that the restraint of trade clause was void.