Stacks Taree v Marshall

In the case of Stacks Taree v Marshall, the dispute centred around the enforceability of a post-employment restraint of trade clause in a solicitor's employment contract. The matter was heard in the Supreme Court of New South Wales. The primary issue for the court was to determine the validity of a clause in the employment contract which restricted the defendant from soliciting clients for a period of two years after his employment ended and from competing with the plaintiff for the same period, both in the same geographic area. The court had to consider whether these restraints were necessary for the reasonable protection of the plaintiff's legitimate interests, and if so, to what extent.

The court examined the nature and scope of the restraint on solicitation, determining whether it should be limited to clients of the firm for whom the defendant provided services or if it should extend to clients generally. Additionally, the court assessed whether the blanket covenant against competitive activity went further than reasonably necessary for the protection of the plaintiff's interests. The court also had to consider the provisions of the Restraint of Trade Act 1976 (NSW) section 4, particularly the principle of severability.

In its judgment, the court found that the restraint on solicitation was necessary and reasonable, but the restraint on competition was not. The court held that the restraint on solicitation should be limited to clients of the firm for whom the defendant provided services, as extending it to all clients would be unreasonable. Furthermore, the court ruled that the blanket covenant against competitive activity was unenforceable as it went beyond what was reasonably necessary to protect the plaintiff's legitimate interests. The court applied the principle of severability under the Restraint of Trade Act 1976 (NSW) section 4, allowing the enforceable parts of the contract to stand while striking down the unenforceable provisions.

The final orders of the court declared the restraint on competition to be void and unenforceable, while the limited restraint on solicitation was upheld as valid and enforceable. The court's decision provided clarity on the enforceability of post-employment restraints in the context of legal practice, balancing the interests of both the employer and the employee.